The Tata Group reclaimed ownership of Air India on Thursday, 69 years after it was nationalized. The salt-to-software conglomerate vowed to transform the losing airline into a world-class carrier.
The handover marks the end of the government's attempt to sell the loss-making airline to a private owner. Since its merger with Indian Airlines in 2007-08, the airline has never turned a profit and reported a loss of Rs 7,017 crore in FY21.
Tatas now owns 100% of Air India and its low-cost subsidiary Air India Express, as well as a 50% investment in ground handling company AISATS.
Following the takeover, Tata group chairman N Chandrasekaran stated that the company's operations would be altered. "My first flight was with Air India in December 1986, and I'll never forget how fantastic it felt to be on board or the thrill of taking off. Such memories are lovely, but now is the time to think about the future. I'm writing to welcome you to the Tata family on behalf of the Tata group. I've learned that preserving the best aspects of the past necessitates ongoing change. In his inaugural address to Air India staff, Chandrasekaran remarked, "We best celebrate a proud legacy by growing, adapting, and embracing the future."
N Chandrasekaran, Chairman of Tata Sons, meets with Prime Minister Narendra Modi in New Delhi on Thursday before the handover of Air India | Photo credit: PMO India
While no official statement has been made about the new board's makeup, the airline's present directors in charge of basic operations—finance, commercial, operations, and human resources—are expected to stay on. The reformed board includes Nipun Aggarwal, Tata Sons' senior vice president; Saurabh Agrawal, Tata Sons' CFO; Suprakash Mukhopadhyay, Tata Sons' group corporate secretary; and Eruch Noshir Kapadia, Tata Sons' former CFO. Vikram Dev Dutt, who was appointed Chairman and Managing Director of Air India only a few days ago, announced his resignation on Thursday. Two government nominees did as well.
The Tatas have been interested in Air India for a long time, according to people who counseled them on the sale. "There was a strong emotional bond here. This was a chance to gain huge market share... "They were able to take over the airline with the correct kind of debt because of the financial sweetener," said Vikram Utamsingh, MD, and Country Manager of Alvarez & Marsal, a professional services business.
Aside from the emotional component, the Tatas had a compelling commercial case for acquiring Air India.