Tatas have been promised 118 planes from AI’s fleet

Shortly after bringing their baby home, Tatas have been assured that as many as 118 planes out of the 141 from the combined lot of Air India and AI Express will be airworthy as and when they take over.

Although, Tata Sons might have to spend a good Rs 1,800 crore on repairs of 23 grounded planes. Another Rs 1,200 crore would be spent on cabin upgrades of the whole fleet.

As per a TOI report, apart from the purchase cost of the carrier, the conglomerate might have to spend Rs 3,000 crore over two years while they have been assured no more planes will be grounded until they take over.

The handover might take until March 31, 2022 to complete and Ernst & Young would be the transaction adviser of Air India till then.

“They have been assured 58 Airbus A320 family planes, 14 Boeing 777 and 22 B787 Dreamliners of AI and 24 B737 of AI Express in airworthy condition (total 118). The government will not spend on making AI’s grounded planes airworthy but more groundings won’t happen,” sources were quoted as saying in the same TOI report.

The premium classes will be made attractive to give foreign carriers a run for their money, the same sources added.

Tatas have stake in AirAsia India with A320s and in Vistara with Boeing 787s, B737s and A320s in its fleet; while AI and AI Express would soon join this list.

“Till the Tatas decide on what model they adopt — one mega airline by merging all four or a low-cost arm by merging AI Express and AirAsia India and a full service one with AI plus Vistara — they can continue operating aircraft on the existing air operator permit (read licence) of the different types,” senior officials were quoted as saying in the corresponding report.

Tatas will send out a letter of intent next while share purchase agreement would be signed within seven days following it.

Thereafter, ‘conditions precedent’ (CP) would have to be met followed by a clearance from regulatory agencies like the Directorate General of Civil Aviation (DGCA), Commission of India (CCI), lenders, lessors and other third party vendors.

As per the sources, CCI won’t be an issue with Tata Group that has four airlines with a combined international and domestic share being nowhere near 50%.

A body of transition management will be put together with Bombay House representatives. Tatas will pay Rs 2,700 crore consideration and take over control unless there is difference of views between the outgoing and incoming owners on the balance sheet.

Read More at: https://economictimes.indiatimes.com/

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