High above in the clouds, the story of an Airline unfolds - AIR INDIA - a tale of wings, dreams, and the daring spirit of human adventure. From its inception as Tata Airlines to its transformation into Air India, this airline has traveled the skies, taking passengers on journeys from departure to destination. From the time before India became independent, through Independence, and after, Air India has seen the changing scenes of the sky.
This is the Air India story, a journey through aviation history, tracing its evolution from modest beginnings to the soaring heights it is now.
The Journey of Tata Airlines to Air India
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The history of Tata Airlines, now called Air India, dates back to the 1930s when JRD Tata founded the flag carrier. It commenced its first operations as an air mail service between Karachi and Bombay (now Mumbai) on October 15, 1932. Until the 1980s, Air India was among the top three profitable airlines in the world. In its earlier phase, conceived as an airmail service, it picked up international mails from Karachi to India and vice versa. Moreover, JRD Tata himself piloted the first flight, and the airline thrived a substantial profit of Rs 60,000 in its very first year of operation, a healthy return of 30 per cent on his 2 lakh rupee investment.
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As the need for personal transport grew, Tata expanded its operations commercially, offering flights from Bombay to Trivandrum at a round ticket cost of Rs 256, equivalent to over Rs 15,000 today. Over six years, Tata Air Mail transformed into Tata Air Service and, in July 1948, transitioned to Air India International when it went public. The airline expanded its services internationally, connecting Mumbai to London via Cairo and Geneva.
After nationalization by the Indian government, JRD Tata became chairman of both Air India and Indian Airlines under the Nehru government. He led the development of Air India for 25 years, introducing services to destinations like Bangkok, Hong Kong and more. Managing 50 plus companies as Tata Sons chairman, JRD Tata set industry standards, making Air India the first Asian airline to induct a jet aircraft.
The fate of Air India took a tragic turn in 1978 when its Boeing 747-200B crashed off the coast of Bombay, killing all on board. Within months, JRD Tata was ousted from the chairmanship of Air India and the directorship of Indian Airlines. Subsequent management changes led to inefficient flight schedules, particularly affecting travelers from Kerala to the Middle East, with unsynchronized timings adding significant travel time. Key positions, including sales and marketing, were handed to individuals outside the aviation industry.
JRD Tata returned to the chairmanship again under the then Prime Minister Indira Gandhi. Later, Ratan Tata took over but resigned after three years. Air India faced financial trouble, losing Rs 181 crores in 1997-98. Unwise decisions, like ordering 111 planes instead of 10, increased debt. The merger with Indian Airlines worsened financial problems. Various attempts were made to revitalize the airline's operations and reduce its debt.
Apart from this, the global aviation industry, including Air India, faced unprecedented challenges due to the COVID-19 pandemic. Flights were grounded, and the airline experienced financial setbacks.
In October 2021, Tata Sons won the bid to acquire Air India, marking a significant moment as the airline returned to the Tata Group, its original founders.
Air India after Tata takeover
Now with the airline back with the original owners, the Tatas will own 100 per cent of Air India and its low-cost arm Air India Express, plus 50 per cent in the ground-handling joint venture Air India. The balanced debt of Rs 46,000-odd crores will be absorbed by the government, which when adjusted against assets worth about Rs 14,000 crores, leaves it with a net liability of around Rs 29,000 crores.
Amidst the financial struggles and operational inefficiencies in the past, Air India is getting a fresh start after the takeover of Tata. Apart from Air India, Tata groups owns two airlines in India - VISTARA, which offers full service flights domestically and internationally, and the AIR ASIA, a budget airline for domestic travel. Now again Tata has added Air India to its portfolio.
Since the Tata takeover of Air India in January 2022, the airline has committed over USD 400 million for brand-new interiors for its entire widebody fleet comprising 27 Boeing 787-8s and 13 Boeing 777 aircraft. The company also made a big move by ordering a whopping 540 planes from Boeing and Airbus, two major aircraft manufacturers. In addition to it, Air India has partnered with Sabre Corporation, a US-based tech company.
To make Air India stronger, Tata Group also hired new members and is planning to merge it with Vistara. Currently, Tata owns 51 per cent of Vistara, and Singapore Airlines owns the remaining 49 per cent.
However, Tata's bigger plan is to have only two airlines - one for premium full-service flights formed by merging Air India and Vistara, and another low-cost carrier formed by merging Air Asia India and Air India Express.
Financial performance
The Tata takeover has significantly impacted Air India's financial performance. In the last fiscal year, the airline incurred a substantial loss of Rs 112 billion (USD 1.4 billion), primarily attributed to financial obligations and the expenses of repairing grounded planes and upgrading aircraft. Despite consolidated losses of Rs 155 billion (USD 1.87 billion) in the Tata Group's aviation business, Air India Express stood out with a USD 1.2 billion (USD 14 million) profit. The Tata Group invested significantly in Air India, allocating over USD 400 million for fleet renovation and committing to a substantial USD 70 billion purchase of 470 new aircraft. An additional USD 200 million went into technology upgrades. Seeking support from Tata Technologies for 3-D printing of spare parts, the Tata Group aims to enhance Air India's competitiveness.
