Challenges ahead for Tata as conglomerate chalks flight plan for Air India
After Tata Sons brought back Air India under its umbrella after winning the bid that cost it $2.4 billion, the conglomerate is set to take a big hold of the aviation market. But the stride ahead won’t be smooth due to a long and complicated series of challenges that lay ahead for the Tata group. According to the industry experts, the challenges range from worn-out fleet of Indian national airline to poor service, the fixing could cost Tata an additional $1 billion or more.
“If you don’t have newer airplanes or airplanes that are reliable, no matter what you do, you are going to have a problem,” said a veteran aviation industry executive. Air India that once was known for its lavish planes and stellar service under the ownership of JRD Tata is now criticized for mounting financial problems leading to additional issues since the mid-2000s. Flights with poorly maintained business class seats and grounding of new Boeing Co 787 Dreamliners to use for spare parts are just few of the myriad of problems that need to be fixed as Tata draws flight plan for Air India.
The biggest advantage of Air India in a competitive aviation market is that it flies non-stop to destinations like Europe and the United States of America. These are the destinations where it enjoys rewarding landing rights. This would be a big advantage post-pandemic as travelers would want to choose direct flights.
Another challenge is the need for a charismatic leader for Air India in lines of JRD Tata. With Tata’s experience in holding the largest hospitality chain in India with Taj Hotels as the pioneer, experts believe that bringing revolutionary changes in staff and services would be an easy task for the group. “The hospitality businesses will help them hugely in setting the image right. The Taj fits in very well with the kind of Air India culture of early years,” said Dilip Cherian, an image consultant.
Tata also owns majority stakes in Vistara and AirAsia India. This will put the company in a strong position to hold negotiations with leading aircraft manufacturers, suppliers, fuel companies as well as airport operators.