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,Beleaguered airline: A pedestrian passing the Air India building in Mumbai. The advent of private and low-cost carriers has caused Air India to lose its edge. — AFP

MUMBAI: Tata Sons Pvt is set to take over ailing Air India Ltd again, more than half a century after the country’s biggest conglomerate ceded control to the state, ending the government’s hold over an airline that for decades defined the lofty ambitions of a newly-independent nation.

A panel of ministers accepted a proposal from bureaucrats, who recommended the conglomerate’s bid ahead of an offer from entrepreneur Ajay Singh, according to sources. An official announcement is expected in the coming days, sources said.

A top bureaucrat in the ministry for Department of Investment and Public Asset Management Tuhin Kanta Pandey said the approval of Air India’s sale was incorrect.

A civil aviation ministry spokesman didn’t immediately respond to a request for comment.

A finance ministry spokesperson couldn’t immediately be reached.

A representative for Tata Sons declined to comment.

The proposed handover is a key victory for Prime Minister Narendra Modi, who has embarked on a bold privatisation plan to plug a widening budget deficit.

It also puts an end to a decades-long struggle to offload the money-losing flag carrier.

Multiple governments have tried to sell the airline – which began life as Tata Airlines in 1932 – but those attempts were either met with political opposition or a lack of interest from potential buyers.

For Tata Sons, the holding company for the salt-to-software empire and owner of British luxury carmaker Jaguar Land Rover, the recommendation means it’s coming back to an asset it started almost 90 years ago.

Established by legendary industrialist and philanthropist J.R.D. Tata, who was India’s first licensed pilot, the airline originally flew mail in the 1930s between Karachi in then-undivided, British-ruled India and Bombay, now known as Mumbai.

Once it turned commercial and was government-owned in the 1940s, Air India quickly became popular with those who could afford to take to the skies

Its advertisements featured Bollywood actresses and passengers were treated to champagne and porcelain ashtrays designed by surrealist painter Salvador Dali.

However, with the advent of private carriers in the 1990s, and then a rush of low-cost, no-frills airlines in the mid-2000s, Air India lost its edge in both domestic and international markets.

The carrier, known for its Maharaja mascot, suddenly wasn’t the only option for flying overseas and its reputation for impeccable service and hospitality began to ebb.

Gulf carriers, including Emirates Airline and Etihad Airways PJSC, also began to offer seamless, and cheaper, connections to Europe and the United States via their hubs in Dubai and Abu Dhabi, hurting Air India even further.


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