As it is often said that, ‘history repeats itself. A similar situation occurred in Tata’s Air India story. It won the bid for ownership of Air India. Tata Group founded the Tata Air Mail with an investment of Rs 2 lakh in 1928 that could fly 80 miles per hour and carried mail and a maximum of two passengers. With the gradual expansion of the company, the name was changed to Tata Airlines in 1938. After the 1946 war, it was listed as a public company holding the name as, ‘Air India.’ Indian government nationalized Air India in 1953, having Tata on board as the chairman for its domestic services.
Air India was known as one of the world’s finest airlines and India’s national pride for being the first all-jet airline, introducing Indian culture by colorful designs and cabin crew pampering the passengers, offered bar service, on-board meals, and magazines. In 2000-01, with the entry of various private players, Air India merged with Indian Airlines and gradually suffered a loss of Rs 72 billion.
In 2019, the government’s interest to sell a 100 percent stake in the airline, it’s subsidiary Air India Express and 50 percent in Air India SATS Airport Services Pvt. Ltd. (AISATS), a ground and cargo handling company, attracted Tata Sons to grab the opportunity to regain their control, 89 years since its inception.
On 8th October 2021, Tata Sons won the bid with Rs 18,000 crores for ownership of Air India, Indian Airlines, Maharajah brands, airport slots at 173 worldwide destinations, and 141 planes. To this, Tata Group chairman, Ratan Tata said, “On an emotional note, Air India under the leadership of Mr JRD Tata had, at one time, gained the reputation of being one of the most prestigious airlines in the world. Tata will have the opportunity of regaining the image and reputation it enjoyed in earlier years. Mr. JRD Tata would have been overjoyed if he was in our midst today.”
Air India is the third airlines brand under Tata Sons after an 84 percent stake in Air Asia and 51 percent in Vistara. Tatas will initially refinance Rs 15,300 crores of the airline’s debt out of a total of Rs 61,562 crores and pay Rs 2,700 crore for acquisitions. The remaining Rs 46,262 crore debt amount will be sent to a government-formed SPV, Air India Assets Holding Limited (AIAHL). Out of its 141 aircraft, Air India will give only 118 in a proper fly-worthy condition, the rest requiring an upgradation. Additionally, several other Tata Group’s firms like TCS, TataNeu, Tata Capital, and Indian Hotels will be able to sell their products to the airlines.