Deepak Talwar

Air India’s Privatisation Edging over IndiGo, Deepak Talwar Shares his Views

On October 8, 2021, Tata Son’s subsidiary Talace Private Limited won the bid for Air India at Rs. 18,000 crores, out of which Rs. 15,300 crores was the debt and Rs. 2,700 crores were paid in cash to the government. Therefore, Air India is all set for a rewired plot of its future and preparing to give strong competition to other airlines. Deepak Talwar, a seasoned market analyst and lobbyist, explains how Indian Aviation is about to see major changes with Tata Group taking over flag carrier Air India. He further elucidates what measures are being taken by Tata to make Air India worthy of onerous competition for IndiGo that has built a dominant position in the domestic airlines market. 

IndiGo CEO, Ronojoy Dutta comments at a CAPA event that he sees Tata and Air India as formidable competition but he welcomes them. He also says that in his opinion, they will become more economically responsible. On the statement of Dutta, Deepak Talwar comments, “With Air India returning to the hands of its previous owner Tata, it will have the advantage of a better diversity in its aircraft fleet.” He adds, “Tata is also a majority stakeholder in Vistara as well as budget airline AirAsia India, owning one more airline will definitely bring a paradigm shift in the current situation of IndiGo and its dominance on the Indian skies.” 

IndiGo, even after controlling more than half of the Indian domestic market, is smaller than Air India’s international operations. Additionally, the airline stands to benefit from the growth of passenger traffic. The experienced staff that Air India has is an experienced and reasonably healthy number of permanent employees. Already existing staff of Air India consist of 2,000 and more multiskilled pilots, maintenance engineers of aircraft, and other polished crew members. 

The airlines will be backend in terms of technology by TCS and Tata Advanced Systems, extending boarding passes on mobile phones, satellite telephony on both international and domestic routes, and multifarious initiatives enabling it to run prominently by the use of technology. Deepak Talwar mentions, “Now that the majority stakes of three carriers – Vistara, Air Asia, and Air India are under Tata group, collectively it will enjoy 25 per cent stakes of domestic market share.” 

According to the International Monetary Fund (IMF), the sale and privatisation of Air India is an important milestone in the privatisation efforts of our country. With the airline fleeing into the private sector, the citizens of India, at large, are hoping that its operations and cost will be streamlined. “While for travellers the shift is a hopeful move, on the other hand, for the TATAs it’s an emotional one as it wins back its airline after a long period of 68 years,” says the expert. 

Air India is seen to be a long-term investment for TATAs, and potentially they will come up with an IPO in the coming five years. Ultimately, it is certain that the sale and privatisation of previously government-owned air carriers is good news for Indian investors as well as passengers. 

The newfangled version of Air India is already packed with strategies and plans that ensure cost-cutting. With the creation of JRD Tata, the airline is prepared under visionary leadership and professional management to give strong competition to IndiGo. 

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Christophe Rude

Christophe Rude

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