"Historic moment", "great news", "delighted": This is how the Tatas reacted to the government’s announcement that the salt-to-software conglomerate had won the bid for Air India.
The Tatas had offered Rs 18,000 crore for acquiring 100 per cent of the state-owned carrier reeling under a mountain of debt. Along with Air India, they will also get Air India’s shareholding in Air India Express and 50 per cent in ground handling company Air India SATS Airport Services.
The Tatas welcomed the decision. While the task of turning it around is tough, it gives a strong opportunity for the Tata Group’s aviation ambitions.
“The Tata Group winning the bid for Air India is great news! While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata Group’s presence in the aviation industry,” said Ratan Tata, chairman emeritus of Tata Sons.
N. Chandrasekaran, the chairman of Tata Sons said they were delighted to be declared the winner for India’s flag carrier.
“This is a historic moment and it will be a rare privilege for our group to own and operate the country’s flag bearer airline. It will be our endeavour to build a world-class airline, which makes every Indian proud,” he said in a statement.
It was JRD Tata who had started the airline back in 1932 as Tata Airlines. Later in 1953, the airline was nationalised. Over the years, its debt and losses have increased, more so due to the merger of Air India and Indian Airlines in 2007.
Many say it's a rightful homecoming for the airline.
“Air India under the leadership of Mr JRD Tata had, at one time, gained the reputation of being one of the most prestigious airlines in the world. Tatas will have the opportunity of regaining the image and reputation it enjoyed in earlier years,” said Ratan Tata on an emotional note, adding JRD Tata would have been “overjoyed” if he was in our midst today.
The Tata Group already run the full-service carrier Vistara in partnership with Singapore Airlines. They also have a budget airline venture with Air Asia. With Air India and Air India Express adding to this list, how the Tatas manage to run four airlines needs to be seen.
Running an airline is a tough business in India, given the high taxes and costs. Budget airline Indigo controls more than half of the market. Some reports have suggested that the Tatas could park the airline business together under one roof.
All these things will now be closely watched out for.