Ratan Tata
| Photo Credit: Reuters
In a memorable photo-op that will be cherished by aviation enthusiasts, Ratan Tata boarded an Airbus A350 brought to India for a demonstration, took a tour of the aircraft, sat inside the cockpit and went on a 40-minute sortie over Mumbai.
Ratan Tata (1937-2024): In-depth coverage
This was in February 2022, just a few weeks after Tata Sons took over the ownership of Air India from the Indian government and a fleet expansion for the airline was long over-due. His restricted mobility didn’t deter him, and an ambu-lift was used to help him board the plane
“Mr. J.R.D. Tata would have been overjoyed if he was in our midst,” he had said six months ago, in October 2021, about the founder of Tata Airlines and the pioneer of aviation in India. The remarks were made when the government announced that Tata Sons had won the bid for Air India’s privatisation. He welcomed the airline back into the Tata fold after a gap of 68 years when it had been nationalised, as well as the opportunity to help Air India regain the image and reputation it enjoyed under Mr. J.R.D. of being one of the most prestigious airlines in the world.
But Mr. Tata’s tryst with the airline business has not been an easy one. The purchase of Air India, saddled with over ₹60,000 crore debt, old aircraft, inefficient employee culture, raised many eyebrows since Tata Sons already owned two airlines, Vistara and AirAsia India. But the government sweetened the deal after it failed to attract any buyers in its first attempt in 2018. In the next attempt, it allowed bidders to indicate the debt they were willing to take on, instead of a pre-determined debt, as well as well as agreed to exit the airline completely by offering 100% stake sale instead of 76%. Finally, Tata Sons bought the airline for ₹18,000 crore, while the government absorbed the balance debt of ₹46,262 crore.
Nearly a decade ago, when Tata Sons joined hands with AirAsia to launch AirAsia India in June 2014 and Singapore Airlines to launch Vistara in January 2015, Mr. Tata’s dream of setting up a domestic airline in India and re-entering the airline business had taken over twenty years.
Back in 1990, Mr. Tata had recently completed his term as the chairman of Air India when V.P. Singh’s government asked Mr. J.R.D. and Mr. Tata whether they would be interested in starting a new domestic airline. They expressed their interest and started putting together a proposal, but soon the government fell. This was one of the three proposals between 1990 and 2001 that Mr. Ratan Tata mooted, but often encountered political resistance.
In 1994, Civil Aviation Minister Madhav Rao Scindia announced cancellation of the Air Corporation Act, which led to the sector being opening up to private players. The Tatas too were interested to throw their hat in the ring. Mr. J.R.D. had passed away in November 1993, and Mr. Tata took the lead in devising yet another proposal. Singapore International Airlines was keen to collaborate with the Tatas and a proposal was submitted in 1995, which included a 60% stake held by the former and remaining with the latter. But there was no decision on it. A few private airlines like Naresh Goyal’s Jet Airways (India) Ltd. and Damania Airways were licensed to compete with Indian Airlines.
“The same government that asked us to start an airline… made sure that this airline would never happen,” Mr. Tata said about the episode during an event held to celebrate the launch of Vistara in January 2015.
In June 1996, a United Front Government led by Prime Minister Deve Gowda came to power. The new Civil Aviation Minister Chand Mahal Ibrahim staunchly opposed the Tata proposal on two premises – the entry of a foreign giant like Singapore Airlines, and limited demand in the market that could upset the prospect of Indian Airlines. Many from that era speak of Naresh Goyal’s meddling to ensure Tatas couldn’t enter the sector.
Again in 2001, the National Democratic Alliance government under Atal Bihari Vajpayee tried to sell a minority stake of 40% stake in Air India. “Tatas and Singapore Airlines submitted a joint bid. Tatas brought financial muscle and Singapore Airlines brought aviation expertise. It seemed like a happy marriage as compared to others where the antecedents of potential bidders couldn’t be verified,” Michael Mascarenhas, then Managing Director at Air India, recalls in a telephonic conversation with The Hindu. But the disinvestment idea was later junked. In the late 1980s, Mr. Mascarenhas had on several occasions worked under Mr. Tata when the former was in-charge of the airline’s in-flight department and the latter the airline’s Chairman. As they would discuss in-flight catering and related aspects, Mr. Mascarenhas recalls how Mr. Tata was very clear about what service standards the airline should aspire to and expressed his disappointment at the decline in quality service at Air India since its nationalisation because of mismanagement and excessive government interference.
Eventually, in 2011, the Indian government allowed foreign airlines to invest upto 49% in domestic airlines paving the way for the Tatas to setup Vistara and AirAsia along with foreign partners.
Speaking about the regulatory rigamaroles he encountered, Mr. Tata said in a speech in Dehradun in November 2010 that it was his refusal to pay a bribe that cost him dearly.
“I happened to be on a flight once; a fellow industrialist sitting on the seat next to me said, ‘You know, I don’t understand, you people are very stupid. You know the minister wants ₹ 15 crore. Why don’t you just pay, you want the airlines.’ I said, you will never understand this. I just want to go to bed at night knowing I haven’t got the airline by paying for it,” Mr. Tata said in the speech.
Published – October 10, 2024 10:52 pm IST
