Monday, October 18, 2021

Tata's Air India acquisition will give aviation sector the lift it desperately need

Long before Yana Gupta injected some blood-red oomph into flight safety demos at Kingfisher, and before Indigo stewardesses in their Pan Am vintage look taught India a lesson or two in ‘6E’ efficiency, the original mascot of Indian aviation was a portly, whiskered gentleman in a turban.

Created by Umesh Rao, an artist at the ad agency JWT, in consultation with Air India’s then commercial director Bobby Kooka, the Maharaja made multiple generations not just in India but around the world dream of the glamorous travel aboard the ‘palace in the sky’. It made Air India an epitome of Indian hospitality and world-class excellence.

The exuberance amid India’s chattering classes over the government confirming the sell-off of the beleaguered national carrier to Tata Sons stems a lot from this nostalgia. And the weight of expectations.

The salt-to-software conglomerate, after all, was the original owner of Air India. Even after it was nationalised after independence, J.R.D. Tata continued to run the airline through the glorious years of aviation in the 1950s and 60s, maintaining its high standards, and then some. Until, of course, a change of government at the centre saw prime minister Morarji Desai unceremoniously dumping Tata. The babus took over and the Maharaja’s downward spiral kickstarted.

The nosedive reached its nadir with Air India’s disastrous merger with Indian Airlines in 2007. The company has not made profits since then, as a classic Delhi (where Indian Airlines was based) versus Mumbai (where Air India was based) turf war to wrest control of the new entity played out. For the record, the capital prevailed, even as the airline’s loss of capital ballooned.

A crash-landing was averted with occasional refuelling—bailouts running into thousands of crores of taxpayer money many times over the past 13 years. And, after a series of near-misses and ‘zero visibility’ cancellations, the government finally managed to deplane the white elephant. Hopes are obviously up that the long-cherished symbol of ‘India’s best’ could again regain its place up among the best in the skies.

“Air India can grow and become one of the finest airlines in the world. But that can happen only in private hands,” Ashwani Lohani had told THE WEEK when he was chairman and managing director of the airline in 2019.

“It is a very, very good buy,” said Sidharath Kapur, former CEO of Adani Airports & former executive director of GMR, which runs two of India’s biggest airports at Delhi and Hyderabad. “It is good for the government, it is good for the Tatas and it is good for India’s aviation sector. Having a strong domestic and international airline like AI under Tatas will support developing International hubs in India, which was a lost opportunity for India.”

“The consolidated Air India and Air India Express will catapult Tata into a league of mega carriers, with over 200 aircraft, flying to every part of the world,” said Jitender Bhargava, former executive director of Air India. “What would have taken Vistara 10 years and a lot of expenses, they are getting it on a platter.”

But the road to a possibly glorious tomorrow is paved with uncertainty and challenges. The first being the question of how to deal with four very different airlines in the kitty “(The Tatas) will in due course of time amalgamate the airlines, because otherwise it can’t become an economical operation,” said Bhargava. But it will test Tata’s mettle, with very little in common between the four. Air India and Vistara are full-service carriers, but have different aircraft types and organisational structures. Air Asia India is a domestic low-cost carrier, while Air India Express is an international low-cost carrier, with one using Boeing 737s and the other Airbus A320s.

18/10/21  K. Sunil Thomas & Nachiket Kelkar/The Week

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