Tata Trusts chairman Ratan Tata has credited the decision to bid for Air India to group chairman N Chandrasekaran. “The decision reached by Tata Sons was totally based on the study undertaken and concluded by those under the leadership of group chairman N Chandrasekaran,” Tata said in an email response to queries from ET.
Tata Sons, the group’s holding company is said to have also sought the counsel of Tata, its chairman emeritus, while putting in what turned out to be a successful bid. Air India is one of the largest acquisitions under the leadership of the current management.
An aviation buff with pilot licences for both fixed-wing aircraft and helicopters, Tata is said to closely follow key global trends in the aviation sector. “It is true that I have a passion for aviation and have enjoyed my time as a type-rated pilot on a variety of aircraft. I have not, however, had an involvement in the decision to bid for Air India other than a positive emotional feeling that we could endeavor to help re-establish Air India to the level of prominence it had in days gone by,” he told ET.
Jehangir Ratanji Dadabhoy Tata founded Air India in 1932 and named it Tata Airlines. In 1946, the aviation division of Tata Sons was incorporated as Air India, and in 1948, Air India International was launched with flights to Europe. The international service could be termed as one of the first PPPs in India, with the government holding 49%, the Tatas keeping 25% and the public owning the rest.
In 1953, Air India was nationalised. Raghu Vishwanath MD, Vertebrand Management Consulting, says the challenge for the current leadership team would be to ensure a significant improvement in user experience to strengthen the brand Air India, which has enormous visibility and emotional attachment with consumers.
“The previous management of Air India had an indifferent and uncaring response to consumers. Tatas should work upon these interpersonal skills of aircraft personnel. Consumers should be able to view the brand in a new light in the hands if Tatas,” he said.
The other big challenge Tatas will have to deal with is ensuring the operational viability of the airline brand from a financial point of view. “The group has now inherited a great brand with greater challenges. The leadership challenge will be in its execution,” said Vishwanath.
The government on Monday issued a letter of intent confirming the sale of its 100% stake in Air India to Tata Group for Rs 18,000 crore.
When Tata Sons won the bid to buy AI, Ratan Tata said: “Welcome Back, Air India… 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”.