As the government and Tata Group negotiate the final terms of the Air India sale, we now know when the carrier will be handed over. According to the share purchase agreement, Air India will pass over to Tata before January 23, 2022, setting a firm date on the transaction. Let’s find out more.
Date set
According to The Times Of India, the government and Tata’s have come to an agreement for a handover date for Air India. The flag carrier will be fully privatized and run by Tata by January 23rd, 2022. This leaves a little over two months for all the details to be hashed out and to form a turnaround plan for the carrier.
While this deadline can be extended mutually by both parties, this seems highly unlikely. It is also possible that the sale wraps up before the Jan 23rd date, with late December and early January previously being floated as the dates. For now, both sides are working hard to make the transfer as smooth and quick as possible.
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More details about the share purchase agreement signed two weeks ago will be revealed in the coming days. This includes what limitations Tata has on reducing employees, selling the brand, and adding new partners, as well as the government’s own responsibilities.
Significant shift
For the first time in nearly seven decades, the Indian government will no longer be a player in the aviation market. While they have retained regional carrier Alliance Air, this is unlikely to play a major role in policy decision-making in the future. From now on, the domestic market has become fully private and more equal.
This can be evidenced by recent changes from the government. For instance, employees can now fly any airline for official or personal travel, lifting a mandate meant to prop up Air India’s finances. Moreover, govt. agencies have also lost the power of receiving advance ticketing, racking up major unpaid bills with airlines.
Job cut out
The Tata Group certainly has a job cut out for itself. Recreating Air India will require billions in costs, including purchasing new planes, hiring and training new staff, rebranding the airline, and refurbishing cabins. This will not be an easy process either, with tough choices needed to be made at several points.
However, there is a huge upside too. Tata has long wanted to become a major Indian airline, and the purchase of Air India is the quickest way to secure that place. With slots in airports around the country and world, AI is a well-known brand and carries name recognition. By rebranding well, Tata could reinvigorate the brand.
What do you think about Tata’s purchase of Air India? Let us know in the comments!
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