The New Air India
The privatization of Air India was approved by the Government of India on June 28, 2017. To kick off the process, a committee has been formed. The government issued an expression of interest (EOI) in March 2018 to sell a 76% stake in Air India, as well as a 50% stake in AISATS, a ground-handling joint venture with Singapore Airport Terminal Services (SATS).
The EOI stated that the new owner would have to take on a debt of 33,392 crores and that a bid would have to be submitted by mid-May in order for the Government to complete the selling process by the end of 2018, but no private firms expressed interest in purchasing the debt-laden airline.
The government issued new tenders for selling the airlines in September 2021, with Spice Jet’s Ajay Singh-led consortium and Tata Sons expressing interest in the bid. Finally, on October 8, 2021, Air India, along with its low-cost carrier Air India Express and 50% of AISATS, a ground handling company, were sold to Talace Private Limited, a Tata Sons’ SPV, for Rs 18,000 crore. Following its re-privatization on 14 February 2022, the airline named the former Turkish Airlines Chairman from 2015 to 2022 as its new CEO and managing director.
He was supposed to take over on or before 1 April 2022, but he declined due to the Swadeshi Jagaran Manch’s demand that Tata Sons reconsider its decision and the government demonstrates. Tata Group purchased Air India in January of last year after winning a bid of Rs 18,000 crore.
The Tata Group has taken a number of steps to gain a larger share of the aviation market since acquiring the airline. According to the plan, the airline will strive to increase its domestic market share to at least 30% over the next five years while significantly expanding international routes from its current market share.
Air India was regarded as one of the world’s top airlines until the late 1960s (well after it was nationalized but with JRD Tata still as chairman). There were no significant Middle Eastern carriers at the time, and Singapore Airlines was still a joint venture with a Malaysian carrier. Air India was the boutique alternative to the giants that rules the skies and had an enviable reputation for service.
It all went wrong in the 1970s, when civil aviation ministers like Karan Singh, who had presided benevolently over Air India’s success without interfering excessively, were replaced by ministers who wanted to act as if they owned the airline.
On Way To Be World Class Airline
The largest deal in aviation history, Air India’s agreement to acquire 470 planes from Airbus and Boeing, will help the airline modernize its fleet, expand its network, and boost its ambition to become “a world-class proposition.” Air India, which was recently privatized and is now owned by the Tata group, will add 210 Airbus A320/321 Neo planes, 190 Boeing 737 MAX single-aisle planes, 40 Airbus A350 planes, 20 Boeing 787 planes, and ten Boeing 777-9 planes to its fleet.
According to Mark Martin, the founder, and CEO of the Dubai-based aviation consulting firm Martin Consulting, the $85 billion deal signals That Air India will awareness of constructing an airline community that is going farther, faster, and longer in phrases of worldwide operations. According to Reuters, the aircraft deal, which had been in the works for more than a year, turned into finalized in London, only a few miles from Buckingham Palace, mentioning reasserts acquainted with the dealmaking process.
The terms of the deal had something for everyone when all parties reached an agreement just before Christmas. Boeing, in particular, will be hoping to expand its presence in India’s single-aisle jet market. Until now, Airbus has dominated that sector of Indian aviation; IndiGo, India’s largest domestic airline in terms of both passengers and fleet size, is entirely dependent on Airbus planes.
According to Martin, the 470-plane deal will also assist the Tata group in competing with Middle Eastern carriers, which have come to be the go-to preference for flyers on worldwide long-haul routes. None of the major Middle Eastern airlines, including Abu Dhabi’s Etihad, Dubai’s Emirates, and Qatar Airways, are members of Star Alliance, a loose group of 26 airlines that includes Air India.
The transaction is also central to Air India’s five-year plan to become a world-class airline. The airline announced the plan last year, saying it will add new domestic and international routes to its network. If it is successful, Air India could transform Indian cities into long-haul flight hubs, similar to what Turkish Airlines has done for Istanbul and Qatar Airways has done for Doha.
The acquisition of Air India has sparked worldwide interest. The leaders of the United States, France, and the United Kingdom, the home countries of Boeing, Airbus, and the jet engine manufacturer Rolls Royce, all welcomed the deal’s commercial benefits for their respective industries. Back home, Air India still has to shake off a bad reputation brought on by years of government ownership, and it hasn’t gotten any better in the year since the Tatas bought the airline.
An inebriated man urinated on a 70-year-old fellow passenger in the business class cabin of an Air India flight in November. The incident was shocking not only for what happened but also for how the airline handled the fallout. The Tata acquisition has also not resolved the operational issues.
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