Maharaja's homecoming
With the Tata Group owning Air India, the consumer can expect efficiency gains and the public exchequer can be relieved of an enormous tide of debt.
As widely expected, Tata Sons has been announced as the new owner of Air India, thereby bringing an end to a protracted disinvestment saga. The official announcement today signifies that the iconic brand retains its charm despite teetering for years and facing numerous obstacles in its path to sustainability. While we would keep decoding the fineprint in the coming days, there are plenty of positive signals. Aviation has seen lot of turbulence and this move will soothe the nerves of various stakeholders.
For the government, it is a huge step in the less-than-smooth privatisation process. The Union finance minister will be very happy to see the exit from a business that used to pile of Rs 20 crore of debt every day on the public exchequer. The new owners also represent one of the most-trusted corporate brands in the country that also set up the airline in 1932 and ran it successfully till it was nationalised. It can be expected that there will be minimum disruptive noise around the choice.
The Air India privatisation is one that has a huge consumer face. The consumers — and they are just going to grow in number as the aviation sector gets a push from the government – can benefit from efficiency gains of a huge airline infrastructure that was lying underutilised for decades. The Tatas can bring all the airline companies in which it has a stake under one operations umbrella. With the widespread landing rights across the world that Air India has, the international traveller can benefit immensely.
The positive signal and boost that the Air India decision lends to the entire privatisation process is immense. It was one of the most complicated deals and now with this chapter closed, the rest of the deals can perhaps be wrapped up with improved confidence levels.
There’s some solace for the employees too. There will be no retrenchment for the next one year. Those found redundant from the second, would be offered a VRS. All employees would continue to get medical facilities even if they are given a VRS.
Integrating the company into the Tata fold may not be easy. But it certainly marks the beginning of the end of the misery that the Maharaja was consigned to.