By Ian McMurtry
Air India Reunites With Tata After 68 Year Separation
After nearly 70 years apart, Tata and Air India are finally due to be united once again after the company won the winning bid for the flag carrier. With a $2.4 billion payout, the Indian government will surrender 100% ownership of the airline and its subsidiary Air India Express to the conglomerate after years of being separate. The airline will operate under a private investment group called Talace Pvt Ltd, which is a wholly-owned subsidiary of the Tata Sons Group.
With the deal finalized, Tata Sons Chairman N. Chandrasekaran said, “at the Tata group, we are delighted to be declared as the winner of the bid for AIR INDIA. 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 endeavor to build a world-class airline that makes every Indian proud. On this occasion, I would like to pay tribute to JRD Tata, pioneer of Indian aviation, whose memory we cherish.”
Welcome back, Air India 🛬🏠 pic.twitter.com/euIREDIzkV
— Ratan N. Tata (@RNTata2000) October 8, 2021
Tata was the initial founder of Air India, an airline that operated under the company’s control between 1932 and 1953. Since then the government has been in charge of the airline, seeing it brought well into the jet but struggling to turn a profit as losses mounted for the flag carrier. Now, following nearly $10 billion worth of losses, the Indian government was keen on removing the airline from its list of burdens.
Tata will now get work utilizing Air India’s fleet of 117 mainline aircraft and routes that cover routes to five continents. The parent company also gains access to Air India Express’s fleet of 24 Boeing 737-800s, which operate destinations inside India as well as to Bahrain, Saudi Arabia, Singapore, and the United Arab Emirates.
Tata’s investment into Air India brings forward another airline to the company’s portfolio. The Indian firm has a stake in two other Indian carriers, with joint ventures with Singapore Airlines and Air Asia creating Vistara Air and AirAsia India, respectively. Tata Sons also has investments in metals, chemicals, financial institutions, automobiles, hotels and power. Tata traces itself back to 1868, operating for over 150 years from its Mumbai headquarters.
Tata was in a duel for the flag carrier against Ajay Singh. Singh made his name as a co-founder and taking on two separate stints as chairman for SpiceJet. He had organized a group of investors to look into acquiring the flag carrier but ultimately could not match the deal that Tata Sons could muster.
Under new management, Air India must now get to work fighting back against the onslaught of low-cost carriers that have come to dominate the Indian domestic scene. Airlines like IndiGo, SpiceJet, Go Air, Air Asia India, and Vistara have all shown strength and eaten away at Air India’s market share. But free of government control, the airline will now attempt to reverse the trend and build on its strong international presence with a domestic resolution.