Talace Private Limited, a Tata Son subsidiary, won the bid for Air India on October 8, 2021, for Rs. 18,000 crores. Of that amount, Rs. 15,300 crores were debt while Rs. 2,700 crores were paid in cash to the government. So, Air India is ready for a restructured future and prepared to give strong competition to other airlines.
Deepak Talwar, a seasoned market analyst and lobbyist, explains how Tata Group is poised to take over flag carrier Air India. In addition, he describes what is being done by Tata to make Air India worthy of onerous competition from IndiGo, which has built a dominant position on the domestic market.
The CEO of IndiGo, Ronojoy Dutta, noted at a CAPA event that he sees Tata and Air India as formidable competitors, but welcomes them. He goes on to say they will become more economically responsible if kept in check. Taking a comment on Dutta’s statement,
Deepak Talwar writes, “I think Air India has an advantage of having a broader fleet of aircraft when it returns to Tata.” He adds, “Tata is the biggest shareholder in both Vistara and AirAsia India. Owning another airline will certainly lead to a paradigm shift in IndiGo’s dominance on the Indian domestic market.”
Air India’s international operations are smaller than IndiGo’s, which stands to benefit from the expansion of passenger traffic. There are 2,000 multi-skilled pilots, maintenance engineers, and other well-polished crew members on Air India’s existing staff. There is a reasonably healthy number of permanent staff at Air India.
By extending boarding passes on mobile phones, telephoning by satellite on both international and domestic routes, and deploying multifarious technologies, various airlines will be able to run prominently by the use of technology. Talwar notes, “With the majority shareholdings in Vistara, Air Asia, and Air India now under Tata Group, the group will enjoy a 25 percent share of the domestic market.”
Air India’s sale and privatisation is considered an important milestone by the International Monetary Fund (IMF) in India’s privatisation efforts. The operating costs and operations of the airline will be streamlined after the airline moves to the private sector, the Indian public hopes. “Travellers may see this shift as a positive move, but for TATAs, it’s more of an emotional one as they win back control of their airline after 68 years,” the expert says.
In the next five years, the TATA Group is expected to float Air India as a long-term investment. Ultimately, it is safe to say that the sale and privatisation of government-owned air carriers is beneficial not only for investors, but also for passengers.
Air India’s new version has already been drafted with strategies and plans to reduce expenses. As a result of the creation of JRD Tata, the airline is now prepared under visionary leadership and professional management to give strong competition to IndiGo.
