Wednesday, October 11, 2017

64 years after Air India's nationalisation, Tata Group looking at bid to fly its bird back home



The Tata Group, which founded Air India 85 years ago and was then forced to relinquish control, said it will look at bidding for the airline put up for sale by the government.

If it acquires Air India, it will be 64 years after its nationalisation.

Tata would "definitely look" at Air India once the government finalised the privatisation process, N. Chandrasekaran, chairman of Tata group's holding company Tata Sons, told a TV channel, Reuters said in a report.

He said Tata, which already has two small airline joint ventures in India, one with Singapore Airlines and the other with Malaysia's AirAsia Bhd, was still not clear about what a sale would look like.

The history will come full circle with the move, underlining not only the sorry fate of government-owned enterprises but also how India's indigenous business groups refused to fade out even after decades of socialist policies.

Tata Sons set up Tata Airlines in 1932. JRD Tata, the legendary entrepreneur, himself flew the first flight between Karachi and Bombay. In 1946, Tata Airlines became a public company and was renamed Air India.
Flying was a passion with JRD Tata. He was the first person to qualify within India to fly, according to the company website. "He got his licence, which bore on it Number 1, on 10 February 1929. As an aviator and pioneer flier, he was the one who brought commercial aviation to India. JRD went on to establish Air-India International in 1948 and became the president of Inter-national Air Transport Association (IATA) within 10 years of its establishment. He remained at the helm of Air India 1978, making it one of the most efficient airlines in the world," the website says.

In 1953, when the government nationalised Air India “through the back door”, as Tata himself put it, it was one of the best airlines in the world. A dream entreprise of Tata, he had built it bit by bit with personal care, down to the menu and curtains. Tata was devastated when he came to know about the decision of then prime minister Jawaharlal Nehru, a Fabian socialist averse to private entreprise. Tata wrote to Nehru: “I can only deplore that so vital a step should have been taken without giving us a proper hearing.”

Tata accepted to become the nationalised airline’s chairman. Air India kept on doing well under him till he was removed in 1977 by then prime minister Morarji Desai.

Today, Air India has become a symbol of government's utter inability to do business. It is saddled with huge debt. The mounting debt is the reason the government wants to exit Air India. The Narendra Modi government has infused nearly Rs 16,000 crore since coming to office in 2014, and the central exchequer is no longer keen on keeping the airline afloat with little sign of a revival.
10/10/17 Economic Times