If aviation veteran Alex Cruz takes over to head India’s national airline, it will no longer be in ‘cruise’ mode. There are quite a few mountains to climb for the Maharaja to get back his throne, writes Tirthankar Ghosh
The airline major that is gaining the maximum number of eyeballs today is none other than our very own Air India. If Alex Cruz, the former British Airways CEO comes to head the carrier, he will have his work cut out. To begin with, Air India will have to unlearn being a carrier for the country’s netas.
Ever since January 27, when the formalities to complete the takeover of Air India by India’s top industrial group, the Tata Group, were completed at a board meeting held at Air India, aviation-watchers have been closely following each move at Air India. The deal also saw the Tatas giving INR 2,700 crore upfront and taking over INR 15,300 crore debt. The group will spend several millions on giving the airline a desperately needed makeover.
The takeover move was heralded by a statement from the Tata Group: “The Tata Group today announced the completion of the transaction for purchase of Air India from the Government of India. The Tata Group takes over management and control of the airline, starting today.
The transaction covers three entities – Air India, Air India Express and AI SATS. Air India is India’s flag carrier and premier full service airline. Air India Express is a low-cost carrier. AI SATS provides a comprehensive suite of ground handling and cargo handling services.”
As Chairman N Chandrasekaran put it, “We are excited to have Air India back in the Tata group, and are committed to making this a world-class airline. I warmly welcome all the employees of Air India, Air India Express and AI SATS to our Group, and look forward to working together.”
What does the takeover mean for the Tata Group? Today, the Group has three airlines under it. There’s Air Asia and Vistara – the Tatas have 51 per cent stake in each – and now a behemoth, Air India. Mukund Rajan, who was with the Tatas and in fact, in the group’s executive council, was quoted by a business daily saying that the Tata’s “are caught between a rock and a hard place”. He went on to point out that to run a successful carrier what was needed was scale. That would entail the Tatas putting in more money. He ended by saying that “the prospects for success are probably very remote”.
Currently, Air India is the largest among Indian carriers in the international skies. Foreign carriers, however, have a larger market share and carried more passengers than Air India when regular international flights were allowed before Covid-19.
Today, Air India has a fleet of 117 widebody and narrowbody aircraft while Air India Express has a fleet of 24 narrowbody aircraft. Quite a few of the planes are owned by Air India. In addition, it got control of 4,400 domestic and 1,800 international landing, and parking slots at airports
Whatever Rajan might say, the Tatas seem to be focused on making airlines successful. Both Vistara and Air Asia had been losing money before Covid struck. Today, both would be financially in the red. Both lost around $845 million through March this year, according to the CAPA Centre for Aviation. Perhaps, more than anything else, Air India means a lot to the Tatas. Getting hold of it was like holding onto family heritage. And the Tatas hope to bring back the days of glory that Air India witnessed.
Aviation experts in India believe that the Tatas have a long uphill climb and if its succeeds it will be a huge opportunity for Air India in terms of international traffic that is being taken awasy by global carriers, Air India has tasted success on the India-US routes and all it needs to do is push ahead.
In fact, Air India had many firsts to its credit. When he flew the Boeing 707 in 1960, it was the first airline to do so in Asia. The service on board the carrier was exemplary – so much so that Singapore Airlines was told to emulate it. Above all, with J R D Tata at its head, the carrier was known for its punctuality and cleanliness. By the 1980s when people outside the airline industry joined the carrier, things started going downhill.
Today, Air India has a fleet of 117 widebody and narrowbody aircraft while Air India Express has a fleet of 24 narrowbody aircraft. Quite a few of the planes are owned by Air India. In addition, it got control of 4,400 domestic and 1,800 international landing, and parking slots at airports.
Air India also has four Boeing 747s. Each one of them is more than 27 years old and are not used for VVIP flights. One wonders if the Tatas will use them.
As for cargo, Air India has its work cut out. Though it ended its freighter operations in 2012, the carrier continues to manage bellyhold cargo and serve more than 70 international and 50 domestic destinations. It has to revamp its cargo products to woo customers from India.
Meanwhile, Air India Express has done well in cargo. It provided yeoman service in the transport of cargo during the pandemic. Using its B-737-800 fleet, it flew fruits and vegetables, to Singapore, Malaysia and a number of West Asian nations.
The airline utilised its 25 daily international departures across the country for export of agri-produce. It also chartered flights to send out fruits and vegetables. In the last financial year, Air India Express lifted 14,000 tonnes of cargo of which 95 per cent was perishables.
The next few months will show which way Air India is going. Till then, die-hard Air India fans wish those days to come back when people in Geneva set their watches to the time at which the Air India flight flew over the city.
************************************************************************
Readers
