The government is denying media reports that it has approved a bid by Tata Sons to take over Air India. But it seems a virtual certainty that the airline will be sold to the Tatas with Bloomberg reporting that an official announcement is expected in the next coming days. So let’s take a peek to see what India’s aviation market might look like in years to come.
Fast-forward to 2024. There’s a fierce battle over Indian skies between IndiGo Airlines and the old-new challenger Tata Air India (let’s call it TAI). Tata was the only real bidder for Air India in 2021 and finally walked away with the not-so-glittering prize that it wasn’t quite sure what to do with.
The government is denying media reports that it has approved a bid by Tata Sons to take over Air India. But it seems a virtual certainty that the airline will be sold to the Tatas with Bloomberg reporting that an official announcement is expected in the next coming days. So let’s take a peek to see what India’s aviation market might look like in years to come.
Fast-forward to 2024. There’s a fierce battle over Indian skies between IndiGo Airlines and the old-new challenger Tata Air India (let’s call it TAI). Tata was the only real bidder for Air India in 2021 and finally walked away with the not-so-glittering prize that it wasn’t quite sure what to do with.
TAI has had a hard time from the day it began flying under the new nomenclature proudly emblazoned on all its aircraft. By 2021, IndiGo had already built up a market share of around 59-60 per cent of the Indian passenger market and was the undisputed choice of a majority of the flying public.
Any challenger was bound to be punched on the nose – more than once. By contrast, TAI – created from the merger of Air India, Vistara and Air Asia India – together only added up to about 25 per cent of the Indian flying market that had been badly battered by the global pandemic.
On the ground, too, there were battles to be fought. Ask any corporate honcho and they will tell you that bringing about a merger between two companies is always a nightmare with both sides fighting for dominance in the new entity. In fact, after a decade, there are still rivalries between the old Indian Airlines staff and people from the former Air India who think that the people from the domestic airline stole the best jobs.
The Tatas had a nightmare three-way logistics and personnel problem on their lap: they had to bring together the vastly different cultures of the Government-run Air India. By contrast, Vistara, jointly owned by the Tatas and Singapore Airlines, had been tightly run with a CEO from Singapore. Air Asia India, though, had never got its management structure right and had never been able to make a dent in the Indian market. Says an aviation industry expert: “Merging three different airlines with three totally different cultures represents a huge challenge.”
To add to the complications, Air Asia was a low-cost airline and Vistara a full-service airline. Air India too, had its full-service airline and Air India Express, its low-cost sibling. It’s standard wisdom in the aviation industry that you can’t mix the two airline models.
01/10/21 Paran Balakrishnan/Telegraph
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