Debt-laden Air India likely to be handed over to Tata Group by Thursday

Some processes like lease novation for a few planes are pending as leasing firms, many of which are foreign banks, are working with reduced workforce due to the spread of Omicron

Debt-laden national carrier Air India is expected to be handed over to Tata Group by January 27.

In a message to the employees of the national carrier on Monday, Air India head of finance Vinod Hejmadi gave the date.

The remaining formalities on the deal are likely to be completed in the next few days.

Last year, the salt-to-software conglomerate won the bid for acquiring Air India at Rs 18,000 crore

A senior government official involved with the disinvestment process said the government intended to hand over the company by January 27 and was rushing to finalise mandatory processes like the closure of financial statements.

He said a few processes like lease novation for a few aircraft were pending because leasing firms, many of which are foreign banks, were working with a reduced workforce due to the spread of Omicron.

A lease novation agreement is necessary because Air India’s ownership is changing hands from the government to Tata Group.

The handover will culminate a long process of the government’s attempt to transfer the ownership of the loss-making airline to a private owner. The airline did not make profits since its merger with Indian Airlines in 2007-08 and reported a loss of Rs 7,017 crore in FY21.

Tata Group has, meanwhile, started the process of familiarising itself with Air India’s operational and commercial processes.

People aware of the development said an integrated team of the group had started interacting with departmental heads of Air India. The changes in the first phase will be small and more to fine-tune the existing processes and customer amenities.

“There is a focus to change the softer aspect of the products initially like meals, on-time performance, call centres, and cabin service improvements. These are simpler things like identifying and training the crew and rostering the best ones on key sectors like the US and Europe. More improvements like refurbishment the cabin and aircraft will come later after operational takeover,” the person said.

As part of the process, Air India’s cabin crew has been asked to be “well dressed” and “well groomed” while associates have been assigned the job of checking the crew on their body mass index, uniform turnout, and dress when they report for a flight. “Each member of the cabin crew shall be assessed once on a quarterly basis. The observations by the grooming associates will be compiled and sent to the in-flight services department,” said a memo from Vasudha Chanda, executive director, inflight services of the airline.

A regulatory team from the group has met officials of the Directorate General of Civil Aviation to start the process of merging the air operator’s permit of the existing airlines of the conglomerate. While a merger of Air India Express and the group’s low-cost airline, Air Asia India, will happen after March, an integration with Vistara will take some more time.

After March 31, the group will fully own Air Asia India because joint venture partner AirAsia Berhad will sell its existing 16.33 per cent stake.