Wednesday, October 27, 2021

Opinion

After 68 years, the Maharaja returns home to the Tatas

Air India will have to improve the quality of the service matching the global carriers and bring about a more professional approach to retain the market share and turn around the company.

By Reena Abdulrahman

info@thearabianstories.com

Sunday, October 10, 2021

“Welcome back, Air India.”That was the tweet by Ratan Tata after the company bought the costliest ‘return ticket’ to get back the baby that the Indian government snatched from them almost 68 years back, after India won Independence.

Now, the national carrier coming to their fold, which they started way back in 1930s, is a sweet revenge as well for the Tata Sons, which paid a whopping Rs 18000 crore to buy it. 

Remember, when the Government of India took it over in 1953, as part of the nationalization, the Tata Group got only Rs 2.8 crore! Yes, time has changed.

Tata has a great tradition in the aviation sector and it is already present in industry. While it has a major brand, Vistara, which is a joint venture between Tata Sons and Singapore Airlines, it holds a major share in Air Asia as well. JRD Tata thought of his own airline company in 1929, when Flying Club was opened in Mumbai, and he enrolled there. After he became a licensed commercial pilot, in 1932, JRD Tata founded Tata Aviation Service, which piloted the first flight of Air India, then called Tata Air Mail. It was a huge success and it made an annual profit of Rs 6 lakh by 1937.

Though the company was renamed Tata Airlines in 1938, JRD Tata changed the name to Air India in 1946. By then it had operations on international routes as well. In the early days, Tata had a DH.83 Fox Moth aircraft, and it had service in different routes, including a weekly service between Bombay and Trivandrum, with stoppage at Goa and Kannur, where there was an airstrip in the cantonment. Though Kannur was not a commercial stop, the flight landed here for refueling, as the tiny flight had to fill fuel at regular intervals. Those days the company charged Rs 75 per passenger between Delhi and Bombay while it was Rs 100 between Bombay and Trivandrum.

“This is a historic moment, and it will be a rare privilege for our group to own and operate the country’s flag bearer airline. It will be our endeavour to build a world-class airline that makes every Indian proud,” said N. Chandrasekaran, Chairman, Tata Sons Pvt Ltd, making the announcement.

With this deal, Tata Group will get ownership of the brands like Air India, Indian Airlines and the Maharajah. It was in 2007 that Air India, which flew international flights, was merged with Indian Airlines, the domestic carrier, in an effort to reduce the losses. However, even this failed to turn around the company. 

As of August 2021, the national carrier has a debt of over Rs 61,562 crore. It is estimated that it incurs a loss of around Rs 7300 crore a year, which means around Rs 20 crore a day. Now, Air India has two brands, Air India and the budget airlines Air India Express (AIXL). If Tata Group uses their expertise and strategizes the operations, it has a great future ahead. Air India has a fleet of 117 wide-body and narrow body aircrafts and AIXL has a fleet of 24 narrow body aircrafts.

But the AI staffers have already raised concern over their future. Will there be retrenchment is the question that worries them. Though the government has said that the staff should be retained for one year after the takeover, the possibility of a manpower cut in the name of VRS is for sure from the second year onwards, because the total permanent and contractual employee strength of Air India and AIXL is 13,500 as of now, and the new owners would not want that much of a mammoth manpower.

Further, we should keep in mind that now the scenario has changed and in the present condition, it will be a herculean task for Tata to turn around the loss-making company that was a prestigious brand in the past. At the same time, since the company might integrate the two other airlines, Vistara and Air Asia with the Air India brand later, it would become the second largest Indian operator after Indigo. Now, it will have to improve the quality of the service matching the global carriers and bring about a more professional approach to retain the market share and turn around the company. The future depends on the roadmap it plans for the future.

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