Tata group now has three airlines, what will be the next strategy?
There is a saying, come late, come right. The government was trying to sell Air India, once counted among the world’s best airlines, for two decades, but eventually it was bought by the Tata group. The same Tata group from whom the government had bought Air India. In these two decades, many airlines came, many closed down, but the love of the Tata group for Air India kept coming to the fore every now and then. Air India was founded by Jahangir Ratanji Dadabhai (JRD) Tata, the former chairman of the group. Then its name was Tata Airlines.
Even after the nationalization of Air India, the government kept JRD as the chairman of the airline for many years. It is said that in those days the executives of the Tata group used to discuss among themselves that JRD was always more concerned about Air India than the Tata group. However, he knew very well that for JRD, the position of Air India chairman was not just a job, but his love for the airline.
So no one was surprised when the Tata group made a bid of Rs 18,000 crore to buy Air India again. JRD started Tata Airlines in 1932 with Rs 2 lakh. On 15 October 1932, JRD made the first flight from Karachi to Mumbai. Then they had brought mail from there. JRD was the first Indian to get a commercial pilot’s license.
Tata Airlines became a public company in 1946. Then its name was changed to Air India. The first flight of Air India International was on 8 June 1948. This flight reached Europe with Maharaja Muscat. Soon Air India International was counted among the best airlines in the world due to its services.
The then Prime Minister Jawaharlal Nehru nationalized Air India in 1953. Then JRD strongly opposed him. Actually the government nationalized 11 airlines at that time. Except Air India, everyone else was in loss. All of them were merged with Air India. JRD then held the post of chairman for 25 years.
When the aviation sector was opened to private players in the 1990s, the Tata group, led by Ratan Tata, tried to enter the sector in 1994 in partnership with Singapore Airlines. But that proposal was rejected by the government. No foreign airline was then allowed to buy a stake in a domestic airline.
Even in the year 2000, Tata and Singapore Airlines unsuccessfully tried to buy Air India. Meanwhile, the Tata group continued its efforts to enter the aviation sector. When foreign investment was allowed in 2012, it merged with Singapore Airlines to form a joint company named Tata SIA Airlines Limited on 5 November 2013. He started an airline named Vistara. In this, Tata Sons holds 51% and Singapore Airlines 49%. Vistara made its first flight on 9 January 2015. A year before Vistara started flying, the Tata group formed Air Asia India in association with Malaysia’s Air Asia. It made its first flight in June 2014.
The Tata group held 51 per cent and Air Asia 49 per cent in Air Asia India. In December last year, Tata Sons raised its stake to 83.67 per cent by buying 32.67 per cent equity from AirAsia. The Malaysian partner had said that its business in Japan and India was suffering a lot.
Now after 68 years, Air India is once again coming under the control of Tata Group. It is also a happy occasion for the 153 year old industrial house which is considered as India’s most trusted name. But now it remains to be seen what is the future strategy of this group with the three airlines Vistara, Air Asia India and Air India.