Sunday, October 10, 2021

Tatas assured of getting AI fleet’s 118 airworthy planes

New Delhi: The Tatas have been assured that 118 aircraft from Air India and AI Express’ combined fleet of 141 will be airworthy when they take over the carrier.

The company may have to spend around Rs 1,800 crore on the 23 grounded planes for various types of repairs.

An additional Rs 1,200 crore will be required to give cabin upgrades to the entire fleet.

Altogether, the conglomerate might have to spend Rs 3,000 crore over two years in addition to the purchase cost of the carrier, according to the people with knowledge of the matter.

The Tatas have also been promised that no more planes will be grounded until they take over the airline.

While the government wants to complete the handover by the end of the year, the complicated process may push the date to March 31, 2022.

Ernst & Young will continue to play the role of transaction adviser until the actual takeover.

“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 said.

They added that Tatas — who have so far not spoken about their airline plans — have been studying AI’s fleet and aircraft seating layout.

“They want to upgrade the fleet in terms of passenger experience and have started work on that. The premium classes (where airlines hope to make money) will be made very attractive and give foreign carriers a run for their money. Economy will also be refurbished,” they said.

Tatas already have a stake in Vistara with Boeing 787s, B737s and A320s in its fleet and AirAsia India with A320s.

AI and AI Express will soon join the group.

“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. Once they decide the model, one airline or two, they will need another AOP/s accordingly that is issued after due diligence,” said senior officials.

In terms of timeline, the next week will see Tatas giving the letter of intent which will be followed by signing of share purchase agreement within seven days.

10/10/21 Saurabh Sinha/Times of India

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