Tata's Air India Challenge

OCTOBER 15, 1932, was a typically warm, muggy day in Karachi in undivided India. JRD Tata, the 28-year-old heir to the Tata business empire and the first licensed pilot in India, strapped himself into Imperial Airways’ single-engine de Havilland Puss Moth aircraft.

- Minhaz Merchant

He took off from Karachi to Mumbai carrying a consignment of airmail. Thus, modestly, was aviation history made in the subcontinent.

JRD would become chairman of Tata Sons in 1938 at the age of 34. The fledgling airline was renamed Tata Air Services and then Tata Airlines, before it acquired its current identity, Air India, in 1946. Seven years later, in 1953, in a fit of pique, Prime Minister Jawaharlal Nehru’s government nationalised Air India.

So, 68 years later, has Air India finally come back home? And what are the challenges that lie ahead?

There are several. But weighed against them are Air India’s invaluable assets. It holds 2,738 landing slots around the world across 42 foreign destinations apart from 4,400 slots at airports in India. Air India Express, part of the privatization deal, has 651 weekly slots, including in Singapore and Dubai. The Air India group has a fleet of 153 aircraft: 128 in Air India and 25 in Air India Express. Add to that the Tatas’ fleet in Vistara (47 aircraft) and AirAsia India (34 aircraft) and the Tatas will now control 234 aircraft.

That’s not all.

Air India has more than 1,500 well-trained pilots and 2,000 experienced engineers. They will be a welcome addition to the human resource talent bank of Vistara and AirAsia India.

The challenges for the Tata group are two-fold. First, to integrate Air India and Air India Express with Vistara and AirAsia India. Second, to break even in India’s hyper-competitive aviation sector.

Merging Air India and its associate and subsidiary firms with Vistara and AirAsia India will cause initial disruption. But once fully integrated, the economics of scale will kick in.