Dr. P K Mohanty in Bhubaneswar, February 3, 2022: Air India was formally handed over to TATAs on Thursday, January 27 almost seven decades after the airline was nationalized. It was a kind of celebrations for Tata Group because they got the airline which they started in the year 1932. It was also a great relief for the government because finally it got rid of the debt-ridden airline. Though efforts were made in the past to sell it off, there were no takers as the airline was incurring heavy losses to the tune of Rs 20 crore a day for the last 15 years.

With stakes in Air-Asia India and Vistara, both of which are loss-making airlines, they have shown a lot of conviction to take the Maharaja back into their portfolio. A team of 30 drawn from Tata Sons, Air India finance department and others worked tirelessly, resolved many challenging issues and closed this highly complicated deal.

In the past, we have heard Air India frequently cancelling or rescheduling the flights resulting in inordinate delays leading to passenger dissatisfaction. Now, the airline must walk an extra mile to restore the confidence back in the minds of the passengers. The salt-to-software conglomerate has made promise to turn the loss-making carrier into a world class airline. It is reported that in order to make it truly world-class, Tatas are going to focus on the in-flight service that includes upgraded menu and reintroduction of certain amenities.

Minute details such as different types of cups and glasses which will be used for serving tea, coffee and wines are being worked upon. The cabin crew are being retrained to provide flawless service. All this will go a long way in making the passengers enjoy their flight and have a different kind of experience.

With the enviable reputation and experience in the aviation sector, TATAs can be expected to make a turn-around. In an interview, Jyotiraditya Scindia, the former minister of civil aviation has also expressed his confidence and said that Tata group would put its full strength to develop its strategy like human resource, marketing capabilities and financial strength.

Now a bigger challenge lies ahead. The airline never made profit since its merger with Indian airlines in 2007. Therefore, the focus should be on profitability and cash generation. With huge accumulated losses, the challenge before the airline is the long-term sustainability. It is good to note that IT department has allowed owners of AI to carry forward losses and set off against future profits.

The Maharaja is definitely going to pose a challenge and enhance competitions among the airlines. With Akasa Air joining the race, the competition is going to be quite intense. It would be interesting to see how the competition unfolds in the coming months, how the competing airlines retain their existing market shares and Air India increases its own.

*Professor, XIM University