The Tata conglomerate had bought the national carrier after placing a competitive bid of Rs 18,000 crore. With this hand over, the ‘Maharaja’ returns home after 69 years
The national carrier, Air India has been handed to the Tata Group today (27 January), nearly 69 years after it was taken from the conglomerate.
On 8 October, 2021, the Tata conglomerate had bought the airline after placing a competitive bid of Rs 18,000 crore.
As the government hands over the airline to the Tatas, here’s a quick timeline of the airline and how it transformed from being privately owned to then being taken over by the government and completing a full circle now — going back to the Tatas.
Origin of Air India
Air India was the brainchild of legendary industrialist and philanthropist JRD Tata, who was also India’s first licensed pilot. His fascination quickly turned into a plan to form India’s first commercial airline.
He established then called Tata Airlines in 1932, and its first scheduled service operated on Karachi-Ahmedabad-Bombay route on a de Havilland Puss Moth aircraft flown by JRD Tata.
In 1938, the airline expanded internationally for the first time. The carrier added Colombo, Sri Lanka (then Ceylon) to its route map in addition to the dozen or so destinations in India.
Nationalisation of the carrier
Things took a turn in 1946 after World War II and regular commercial services in India went back to normal. It was then in August that Tata Airlines was converted into a public company and its name was changed to Air India.
It is reported that JRD Tata was completely against the idea of nationalisation. He was of the view that the government of India had no experience in running an airline company, and nationalisation would mean bureaucracy and lethargy, a decline in employee morale and a fall in passenger services.
On 8 March 1948, Air-India International formally incorporated with 49 per cent capital participation from the Government of India.
The government of the day still wanting to employ JRD’s expertise, invited him to lead Air India and Indian Airlines as its chairman. After protracted conversations at Tata Sons, JRD accepted the chairmanship of Air India and a directorship on the board of Indian Airlines.
JRD continued to serve on both positions until 1978.
In February of 1978, the Morarji Desai government removed JRD Tata from the boards of Air India and Indian Airlines following the tragic crash of Air India’s Boeing 747 on 1 January of the same year. The crash killed 213 people on board.
In 1980, Indira Gandhi reinstated JRD on the boards of both airlines but not as chairman. Finally, in 1986, he stepped down from the boards and his successor Ratan Tata was appointed as Air India Chairman by the Rajiv Gandhi government.
The Tatas’ ties with Air India came to an end in 1989 when Ratan Tata stepped down from the position of chairman.
Attempts to privatise
After functioning as the national carrier and facing losses, the Atal Bihari Vajpayee tried to sell a minority stake (40 per cent) in order to raise funds in 2001. However, that process didn’t take off.
In 2020, the Narendra Modi government decided to sell the entire 100 per cent stake and issued an Expression of Interest (EOI) to invite bidders. The COVID-19 pandemic delayed the process further.
It was finally announced that the Tatas had won the bid on 8 October 2021 and with that life came a full circle with the Maharaja back in the Tata stable.
What immediate changes can we expect with Tatas’ takeover
The transfer from the government to Tata group is unlikely to affect operations drastically, at least for the first few months. While there could be some minor changes, no major shakeups are likely for a few months. This includes changes in staff or flight operations.
As per reports, the carrier has already started bringing in minor changes, such as cabin crew BMI and grooming to be checked when they report for flights. As reported previously, the unions have opposed this measure.
Also, Air India announced on Thursday that it will be enhancing its in-flight service in first and business class.
A PTI news report said that enhanced meal service will be available on four flights on Thursday. Moreover, the airline management is also looking at upgraded service procedures. Trolley service for liquor and newspapers, which was discontinued due to COVID-19 pandemic, is being brought back.
A Business Standard report said that the airline is also expected to back certain amenities and services which were discontinued due to the pandemic. This includes duvets, blankets and pillows. Linen and hot towels too would be carried on board as was the practice earlier.
While this is all short-term, it is unsure how things will progress in the long term. However, there are reports that the group may look at merging all its airline businesses, allowing it to eliminate additional expenditure and generally more revenue.
With inputs from agencies