Air India back to Tata group

The Airline was founded in 1932 and its first flight was between Karachi and Bombay

        Tea to software Indian giant Tata is buying back Air India, 89 years after founding it as Tata Air and half a century following its nationalization, the government said on Friday. The Rs.180 billion (2.4 billion US Dollar) marks the end of lengthy effort to privatize the heavily indebted flag carrier that according to the government has eaten up Rs.1.1 trillion in public money since 2009.  The airline was founded in 1932 with the first flight piloted by Tata's eponymous Chairman himself JRD Tata flying mail and passenger in a single  propeller  de Havillan Puss Moth from Karachi to Mobmay, as the city was known then.

            Tata air offered a slice of high life with Bollywood  actresses in its adverts and at one point commission Spanish surrealist artist Salvador Dali to design its ashtrays. The airline was nationalized in the 1950s  and in the decades that followed the Maharaja of the Skies because synonymous with the hope and ambitious  of newly independent country.

            "Welcome back" Air India Tata's patriarch Chairman emeritus  Ratan Tata tweeted on Friday, while admitting it would be take considerable effort to rebuild the company. The airline at the one time gained the reputation of being one of the most prestigious airlines in the world. Tata's will have the opportunity of regaining the image and reputation it enjoyed in earlier years he said. In the 1990s Air India began to struggle with competition on domestic and international routes from Golf carriers and now frills airlines, and the firm started amassing huge losses and debts.

            Successive Indian governments tried to privatize the company but its debts and New Delhi's insistence on retaining a stake put off would be buyers. Finally last year Prime Minister Narendra Modi's government seeking to sell of a raft of state assets, agreed to take bids for the entire company but to retain some of what the airline owes.

            Under the deal announced on Friday, Tata will take around a quarter of Air India's dues of Rs.615bn while the remainder will be transferred to a special purpose vehicle. Tata Group, one of India's biggest and oldest companies employer over 8,00,000 people in the 100 countries. Founded in 1868 by Jamestiji Tata, the "Father" of Indian industry, Tata owns Jaguar Land Rover software giant TCS Tata Steel as well as interests in chemicals, hospitality, consumer goods and communications.

                Its subsidiaries include 29 listed entities including software giant TCS, Jaguar Land Rover-parent Tata Motors, Tata Steel and others, which have a combined market capitalization of over Rs.250bn. Buying back India's biggest international airline domestically IndiaGo is number one is part of ambitious plan.