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Journalism of Courage
Aviation was one of Ratan Tata’s personal passions. And it was indeed his final frontier as the leader of the salt-to-software conglomerate Tata group. Although Air India was born in the House of Tata in 1932, the airline was nationalised in 1953. While the father of Indian aviation and then chairman of the Tata group — JRD Tata — continued at the helm of Air India till the late 1970s, the group could not have had an airline of its own as the government did not permit private sector airlines then.
But as India embraced liberalisation in the early 1990s, the country’s aviation sector also opened up for private carriers. The Tata group, too, had entered a new era with a young Ratan Tata succeeding the conglomerate’s patriarch JRD Tata as chairman. Both men were evidently in love with aviation and wanted the group to build another world-class airline. With that dream, Ratan Tata got to work. But little would he have known then that it would take almost two decades to have a Tata airline take to the skies.
In 2010, Ratan Tata—already India’s most respected and admired business leader by then—publicly said that the group’s efforts to enter the airline business jointly with Singapore Airlines were “thwarted” on multiple occasions.
“We went through three governments, three Prime Ministers and each time there was a particular individual who thwarted our efforts to form another airline,” Tata had said in November 2010 in Dehradun while addressing an Uttarakhand government event.
While Tata did not name the individual, industry veterans believe he was referring to Jet Airways’s Naresh Goyal, who was seen as someone having considerable clout with the political establishment as well as bureaucracy. In that address, Tata had also mentioned that a fellow industrialist had suggested that he pay a Rs 15-crore bribe to a certain minister to get a go-ahead for the airline, but it was not something that he was willing to do. Tata never revealed the identities of the industrialist and the minister.
Ratan Tata’s first attempt at starting an airline dates back to 1994, when PV Narsimha Rao was the prime minister. Tatas and Singapore Airlines were wanting to establish a joint venture carrier in India with the latter holding 60 per cent stake, and the Indian business group taking 40 per cent stake.
The proposal was reportedly met with stiff resistance from various quarters—politicians, bureaucrats, and other airlines. One of the major arguments made against the proposal was that a strong foreign airline would end up having a massive stake in a domestic airline, something that many in the establishment could still not look past despite the country having already started on an irreversible path of liberalisation.
After nearly two years of back and forth, the necessary approvals were still elusive. In the meantime, the United Front government had taken charge at the Centre in 1996 with HD Deve Gowda at its helm. Ratan Tata made a renewed attempt with a number of assurances, including switching the proposed shareholding between the Tata group and Singapore Airlines to allay concerns over a foreign airline holding majority stake in an Indian carrier.
With Tata’s persistence and specific assurances, it seemed that a Tata-Singapore Airlines carrier was just about to take off. Even the now-abolished Foreign Investment Promotion Board (FIPB)—the agency that used to approve foreign direct investment (FDI) proposals—gave its go-ahead. But it was not to be. Then civil aviation minister CM Ibrahim was vehemently opposed to the proposal, and is widely believed to have stymied the proposal despite several senior ministers in the cabinet backing it.
In 2001, the BJP-led government under Atal Behari Vajpayee wanted to offload 40 per cent stake in Air India, and the Tata-Singapore Airline combine was keen on picking up that stake. They even emerged as the sole bidders but the entire process was eventually undermined by resistance from labour unions and other airlines, due to which Singapore Airlines withdrew from the exercise. This ultimately led to the Tata group withdrawing the offer.
With earlier attempts leaving a bad taste, the Tata group seemed to have put to rest its ambition to be in the airline space. A decade after that failed Air India divestment, the Centre relaxed FDI rules in aviation in 2012, allowing foreign airlines to own up to 49 per cent in Indian carriers. Many in the industry believed that the relaxation came after Jet Airways’s Goyal lobbied hard as he wanted to sell a stake in his airline to Abu Dhabi-based Etihad Airways.
In 2013, some months after Ratan Tata had hung up his boots as the Tata group’s chairman, the conglomerate announced not one but two airline ventures—AirAsia India in partnership with Malaysia’s AirAsia Berhad and Delhi-based Telestra Tradeplace, and Vistara with Singapore Airlines. AirAsia India and Vistara took to the skies in 2014 and 2015, respectively. Although the Tata group was then under the chairmanship of Cyrus Mistry, the two airlines had Ratan Tata written all over them.
The dream of a Tata airline was realised but there was some unfinished business on the table—Air India. Under government ownership, the airline had been reduced to a pale shadow of the world-class airline it used to be decades ago under JRD Tata. The writing on the wall for Air India was clear: unless a private sector player took control of the airline, it was destined to perish.
The Tata group, now under the chairmanship of Natarajan Chandrasekaran and with sufficient experience of running airlines under its belt, decided that it was time for Air India’s homecoming. The Tatas won the bid for Air India in October 2021 and took over the airline on January 27, 2022.
“On an emotional note, Air India, under the leadership of Mr. J.R.D. Tata had, at one time, gained the reputation of being one of the most prestigious airlines in the world. Tatas will have the opportunity of regaining the image and reputation it enjoyed in earlier years. Mr. J.R.D. Tata would have been overjoyed if he was in our midst today.” Ratan Tata had said in a statement on October 8, 2021.
It is safe to say that Ratan Tata, too, was overjoyed, for he stood at his final frontier.
