“Air India has been sold to the Tata Group for $2.4bn (£1.7bn),” Scorch announced happily, probably reflecting the joy the Tata Group must have felt.
“Tata Group is India’s largest conglomerate. It manufactures automobiles, airplanes, and other products. A conglomerate is a company with different, unrelated businesses under its umbrella.”
“Wait, didn’t the airline originally belong to the Tata Group?” Verum said.
“Yes,” Scorch said, “In 1932, Jehangir Ratanji Dadabhoy Tata launched Tata Air Mail. It was a courier service connecting different cities of India. It transported letters and other mail. Soon, it was renamed Tata Airlines and started carrying passengers. It became India’s first airline!
In 1946, the Tata Group made the airline public and renamed it Air India. Going public means a private company becomes a publicly-owned company. In 1948, the government of India bought 49% of the airlines. In 1953, the government nationalized it. It means a privately owned company was transferred to government control.
But from 2007, Air India started losing money. The government of India has been trying to sell parts of the airline since 2018. But it had no buyers because it had massive losses. In 2019, the airline posted a total loss of ₹ 12.8bn.”
“In January 2020, the government decided to sell the entire airline,” Scorch continued, “It also changed the terms of the sale. It assured companies that it will make the airline’s debt (money owed) less burdensome.
The Tata Group, Interups, a US-based investment company, and Ajay Singh, the operator of SpiceJet airlines, bid for Air India. A bid is an offer made to buy the products presented for sale.
The government sold the airlines to Tata Group, which was the highest bidder!”
‘Nice!” Felix said, “But why was Air India undergoing a loss in the first place?”
“The airline blamed high fuel prices, airport usage charges, and competition from other airlines,” Scorch said, “But now experts believe Air India to be good for Tata Group.
Air India has a fleet of 130 aircraft. The new buyer will have control of the airline’s 4,400 domestic and 1,800 international landings and parking slots. Air India also owns lands, buildings, planes worth more than ₹ 450bn ($6bn).
It has a collection of more than 40,000 art pieces. It includes an ashtray designed and gifted by the famous Spanish artist, Salvador Dali.”
“Few minutes after the purchase, Chairman Ratan Tata tweeted an old photograph of JRD Tata with an Air India plane in the background as a welcome note to what originally belonged to the Tatas,” Scorch added.
“Memorable moment,” Orak said.