Indian conglomerate Tata Sons must take control and start operating Air India (AI, Delhi International) at the latest by January 23, 2022 - referred to as the “long stop date” in the share purchase agreement signed with the government last month - a source “in the know” has told the Times of India.
With the transaction expected to conclude by December, Tata is due to then take full control of the flag carrier and its low-cost subsidiary Air India Express (IX, Delhi International), along with airport services and groundhandling firm Air India SATS. It has not yet revealed what its plans are for the airline, its management structure, or fleet or cabin upgrade plans.
“The long stop date of January 23 is the outer limit by which Tata’s wholly owned subsidiary Talace has to take over Air India. This date has been agreed on by both parties,” the source said.
“If there is a delay in fulfilling conditions precedent (CP) requirements or if there is disagreement on the closing balance sheet, the long stop date can be extended with mutual consent of both parties. But that is an option unlikely to be exercised, as January 23 was the date agreed on by both.”
According to the newspaper, high-ranking government officials also do not foresee see any delays in the takeover and are trying to smooth the way for the transfer of control to take place by the end of 2021.
In related news, the Indian Pilots’ Guild has expressed its expectation in a letter to Air India’s senior management that the process of settling unpaid wages is carried out before the new owner takes over, the Economic Times reported. The union said it was “optimistic” about forging a fresh start with Tata Sons but warned the current management not to “exploit” employees as it could lead to mass protests and strikes just as the company changes hands.
A 2006 wage deal allocated a monthly Layover Subsistence Allowance for captains and co-pilots, but according to the guild 25% of these amounts have been withheld and are still due. Overtime payments arising out of the agreement are also overdue. And, it added, a 25% pay cut was unfairly and unilaterally forced on all employees in 2012.
“As we are all aware, the government is committed to settling all outstanding dues with employees pre-handover. In this regard, certain points must not be missed while implementing this process,” the union said.
