Pioneer in Indian Aviation
Aviation was a significant personal interest of Ratan Tata. It truly represented his ultimate challenge as the head of the Tata group, a vast enterprise spanning from salt to software. Although Air India originated from the Tata family in 1932, it became nationalized in 1953. Even though JRD Tata, the pioneering figure of Indian aviation and former chairman of the Tata group, led Air India until the late 1970s, the group could not operate its own airline due to government restrictions on private sector airlines at that time.
However, as India adopted liberalization in the early 1990s, the aviation industry opened up to private carriers. The Tata group also found itself in a new chapter, with a youthful Ratan Tata succeeding the venerable JRD Tata as chairman. Both individuals shared a profound passion for aviation and aspired for the group to create another exceptional airline. With that vision in mind, Ratan Tata set to work. Yet, he could hardly have anticipated that it would take nearly twenty years for a Tata airline to finally take flight.
Partnership with Singapore Airlines
In 2010, Ratan Tata—by then already regarded as India’s most esteemed and admired business leader—stated publicly that the group’s attempts to launch an airline in partnership with Singapore Airlines had been “thwarted” several times.
“We navigated through three governments, three Prime Ministers, and each time there was a specific individual who obstructed our efforts to establish another airline,” Tata remarked in November 2010 in Dehradun while speaking at a Uttarakhand government event.
While Tata refrained from naming the individual, industry insiders believe he was alluding to Naresh Goyal of Jet Airways, who was perceived as having significant influence with both the political establishment and the bureaucracy. In that speech, Tata also shared that another industrialist had suggested he pay a bribe of Rs 15 crores to a certain minister to obtain approval for the airline, but that was not a course of action he was willing to consider. Tata never disclosed the identities of the industrialist or the minister.
Unsuccessful Venture
Ratan Tata’s initial endeavor to launch an airline dates back to 1994, during PV Narsimha Rao’s tenure as prime minister. The Tatas and Singapore Airlines aimed to form a joint venture airline in India, with the latter acquiring a 60 percent stake and the Indian business group holding 40 percent.
The proposal reportedly faced strong opposition from various sectors—politicians, bureaucrats, and competing airlines. A key argument against the proposal was the concern that a powerful foreign airline would hold a significant stake in a domestic airline, a notion that many in the establishment were unable to overlook, despite the country already embarking on an irreversible path of liberalization.
After nearly two years of negotiations, the required approvals remained out of reach. Meanwhile, in 1996, the United Front government assumed control at the Centre, led by HD Deve Gowda. Ratan Tata made another attempt, offering several assurances, including changing the proposed ownership structure between the Tata Group and Singapore Airlines to ease worries about a foreign airline possessing a majority stake in an Indian airline.
With Tata’s determination and clear commitments, it appeared that a Tata-Singapore Airlines venture was on the verge of launching. Even the now-defunct Foreign Investment Promotion Board (FIPB)—the body that previously sanctioned foreign direct investment (FDI) applications—approved the plan. However, it was not meant to be. The then civil aviation minister CM Ibrahim strongly opposed the initiative and is widely thought to have thwarted the proposal, despite support from various senior ministers in the cabinet.
In 2001, the BJP-led administration under Atal Behari Vajpayee aimed to divest a 40 percent stake in Air India, and the Tata-Singapore Airline partnership was eager to acquire that share. They even emerged as the sole bidders, but the entire endeavor was ultimately compromised by pushback from labor unions and other airlines, prompting Singapore Airlines to withdraw from the process. This ultimately resulted in the Tata Group retracting its offer.
The Reckoning
With previous efforts leaving a sour taste, the Tata group appeared to have shelved its aspirations in the aviation sector. A decade after the unsuccessful Air India divestment, the Centre relaxed FDI regulations in aviation in 2012, permitting foreign airlines to hold up to 49 percent of Indian carriers. Many industry insiders believed that this relaxation was influenced by Jet Airways’s Goyal, who lobbied vigorously to sell a stake in his airline to Abu Dhabi-based Etihad Airways.
In 2013, just months after Ratan Tata stepped down as the Tata group’s chairman, the conglomerate announced not one but two airline ventures—AirAsia India in collaboration with Malaysia’s AirAsia Berhad and Delhi-based Telestra Tradeplace, and Vistara with Singapore Airlines. AirAsia India and Vistara took flight in 2014 and 2015, respectively. Although the Tata group was then under Cyrus Mistry’s leadership, the essence of Ratan Tata was evident in both airlines.
The aspiration for a Tata airline was fulfilled, yet there remained unfinished business—Air India. Under government control, the airline had diminished to a mere shadow of its former world-class status from decades ago when JRD Tata was at the helm. The future for Air India was unmistakable: without the intervention of a private sector player, it faced inevitable decline.
The Tata group, now led by Natarajan Chandrasekaran and equipped with ample airline management experience, concluded that it was time for Air India to return to its roots. The Tatas secured the bid for Air India in October 2021 and officially took over the airline on January 27, 2022.
Tata Group Acquires Air India
In 2021, following an extensive bidding process, the Tata Group successfully secured the acquisition of Air India, signifying the airline’s return to its original founders. The government divested its entire 100% stake in Air India to the Tata Group for ₹18,000 crore.
After 69 years of being a state-owned entity, Air India and Air India Express rejoined the Tata Group in January 2022.
The acquisition was completed, leading to Air India once again operating under Tata ownership. The group revealed ambitious plans to invest heavily in upgrading the fleet and improving service quality.
The revival of Air India under the Tata Group is a reflection of J.R.D. Tata’s aspirations and the lasting legacy of the Tata family. This signifies the start of a new era for the airline, one that is anticipated to be abundant with innovation, expansion, and a refreshed sense of pride.
The Tata Group is determined to restore Air India to its previous stature, capitalizing on its history of outstanding service and management. Initiatives for fleet modernization, route expansion, and aligning Air India with other Tata aviation enterprises are currently being developed.
Ratan Tata Passes Away At 86
Renowned industrialist and Tata Sons Chairman Emeritus Ratan Tata passed away at the age of 86 late on Wednesday. He had been hospitalized at Mumbai’s Breach Candy Hospital since Monday due to an abrupt decline in blood pressure and was in critical condition in the intensive care unit.
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