India's biggest brand ambassador, Air India, formally returned to its owner after a long haul

Article by

Siddhi Gupta, Student

India's biggest brand ambassador Air India formally returned to its owner after a long haul. The company was formally handed over to the Tata group, on 27 Jan 2022. Air India return to its founding group after 69 years.

Air India

Tata group founder JRD Tata had originally launched Air India in 1932. The nation's first carrier outstretched wings between Karachi - Bombay, in the undivided, British- ruled India. After the second world war, when the airline's service started again on 29 July 1946, Tata Airlines converted into Pvt. Ltd. company and was named Air India Ltd. It was nationalized in 1953.

Now, Tata's wholly-owned subsidiary tales Pvt. Ltd. made an enterprise value (EV) bid of 18,000 crores. Tata already has 51% shares on Vistra and 81% on Air Asia. It means Tata gain 25% shares in the aviation industry alone. The market share of Air India is 13.3%.

Business Angle

After purchasing Air India, Tata wants to consolidate its services and work on a large scale. The low-cost Airline, Air India Express is also a profitable venture. In the previous financial year, they earned 169 crores profit. So, the company also consolidated with another low-cost Airline which is Air India.

Challenges

One of the immediately focused areas would be to rewrite the agreement and refinance the 15,300 crores worth of Air India debt which they have taken over while Air India has 141 aircraft. It will hand over 180 in a fly-worthy condition to the group from the engine to the landing area and even the entertainment system, the government has set a reserve price of 12,906 crores for Air India. The Tata's winning 18,000 crore bid and update of 2,700 crores are for the acquisition, now they will have to pay around 9,186 crores on account of capitalized lease obligation of 42 leased aircraft.

Changes/ Public Benefit

It will not have any effect on passengers, it is good for all of us as we got a new low-cost Airlines. Now we will board flights on Air India. If we travel in Air India, we will probably get better service now. The second question is, being a private airline, will it make travel expensive for us. We know that private airlines can decide on their own and they do not have any public pressure. So the answer is no, the price of the ticket is decided by the Director General of Civil Aviation (DGCA) which is an organization of the Government of India that's why there is no change in the rental cost of Air India.

Even things may change like your travel experience on Air India flight may be better than before, you may get better and more comfortable seats to sit and you may get cleaner airline and other facilities also.

Conclusion

Air India, now owned by the Tata group, remains India's go-to airline in time like in the Ukraine war.

Air India now feels like home because it's our Indian company

Also, Air India is sending flights to airlift Indian citizens from Ukraine via Bucharest to rescue Indians. Hope for the best because Maharaja (Air India) is back to its home once again.