The Tale of Tata and Air India

Air India was founded by J.R.D Tata in 1932 as Tata Airlines. It was the first commercial airline of India and J.R.D Tata, also a licensed pilot, flew its first flight from Karachi to Mumbai and to Madras. The first carrier of the company was Havilland Puss Moth. With the independence of India, the government started thinking about nationalising Airlines which JRD Tata was completely against as the government did not have much ability to run it like the experts did. But the government gave a cold shoulder to his cry. 

Tata Airlines was converted into a Public limited company after World War II and was renamed as Air-India. In 1953, the Government of India nationalised all airlines of India by passing the Air Corporation Act and bought majority of the stakes from Tata Sons. They formed two corporations for international and domestic flights known as Air-India international corporation and Indian airlines corporation respectively. 

To improve the search option for reservation of flights Air-India removed the hyphen sign from Air-India and as a result it became “Air India” in 2005. The government of India needed the expertise of JRD Tata, and thus kept him as a chairman of the Airline. In between changing positions, JRD Tata stepped down from the board in 1986 and Ratan Tata was appointed as the next chairman by Rajiv Gandhi. Eventually, In 1989, Rata Tata stepped down from the position of chairmanship.

In 1994, the Indian government began privatization of Air lines. Due to massive competition from private airlines, mismanagement from board, bad mergers and other poor choices, Air India started struggling financially. On the other hand, multiple attempts were made to privatize Air India again. With the merger of other airlines, Air India became completely debt ridden and continued to operate at loss. 

The first attempt to sell Air India was made in 2001 by Atal Bihari Vajpayee the then prime minister of India. But it did not happen. In 2017, the Indian government finally approved to privatise Air India and made an offer to sell 76% of the stake from Air India which had a debt exceeding Rs. 50,000 Crores. But no bid was made for this offer. In 2020, the Indian government finally decided to sell 100% stake of Air India where they had already released some of the debt off of the Airline. Two main bidders for Air India were Tata Sons and Spice Jet led by its promoter Ajay Singh. Decisively, Tata Sons won the bid and Air India was finally handed over to the Tatas by the government. 

It seems like the Airline has just arrived back to its terminus. To introduce India’s first Airlines and winning back its acquisition from the government, the tale of Tata and Air India was no less than a theatrics. Now, everyone is eagerly waiting to see how the Tatas will change the operations of Air India and regain the confidence back from the citizens. They had already made it clear that they will not be the same as before (in the golden age) but will make sure that Air India stands at a competitive edge and be the wings of our nation.

Your Company

    Subscribe to our Newsletter

      Proprietorship Registration