The sale of Air India is historic for more than one reason. Firstly, it marks the culmination of a practice that was first started two decades ago. Second, seven decades after nationalisation, the airline goes back to its original owner, the Tata Group. On Thursday, Tata Sons Chairman N. Chandrasekaran handed over the career to the winning bidder after meeting Prime Minister Narendra Modi.
With Tata in its cockpit now, hopes are high that Air India will be back in health after years of draining public funds. Considering the deep pockets, experience and reputation of the group in aviation, it is a fitting hope for the port. Ironically, a major challenge will be how to optimize its presence in this market. With the acquisition, the Tata Group now has stakes in four carriers: Air Asia and Vistara, the latter two joint ventures, with Singapore Airlines, in addition to Air Asia and Air India Express. Tata’s partnership means it doesn’t only have its own interests to serve, which could complicate its quest for operational synergy and strategic convergence. It all sounds cumbersome, but then again, this is a group that is no stranger to the complexity of diversity.
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