Sans govt support, high costs & staff management of Air India to test Tata

Sunday, 10 October 2021Newsdesk

For the Tata Group, which successfully runs businesses ranging from retail and software to steel and automobiles, extending its track record to Air India as well may take more than just financial investment into the loss-making airline. While experts analysing Tata Group’s acquisition of 100 per cent of Air India from the government indicate the need for an equity infusion of over $1 billion in the airline over the next few years, they also underscore a call to transform the airline’s culture.

New Delhi, 10 October 2021

As per news report of The Indian Express, On Friday, the government announced that the Tata Group was the highest bidder in the airline’s disinvestment process, having placed a bid of Rs 18,000 crore, of which Rs 2,700 crore will be paid to the Centre in cash and the remaining will be absorbed as debt from the airline. Even as the airline comes with a set of valuable assets including prime slots, landing rights and a huge fleet, it also brings with itself a set of pitfalls that the Tata Group may look to address. These include higher than industry standard aircraft lease rentals, burdensome maintenance contracts, and far better than industry average of crew salaries.

Source - indianexpress.com