The big news of the week gone by is the return of Air India to the Tata stables. The Tata hangars really! What J R D Tata founded in 1932 as Tata Airlines is back within the corporate ownership of Tata Sons and its newly formed subsidiary, Talace Pvt. Ltd. The Maharajah returns to the place and palace of his birth, with a lot of noise and fervour for sure.
Over these 89 years, a lot has happened over the airline and there have been ups and downs. Not so coincidentally, the models of private and public ownership have coincided seamlessly with its peaks and troughs. An airline that had established for itself global repute as one of the best to fly with, finally floundered in recent years—with many in the industry and government equally wondering at times whether there would be anything left to sell at all.
Thankfully, the sale has actually happened. Happened in time, even as Air India remains the largest international carrier out of India with an 18.6% market share, touching as many as 60 international destinations. There is a huge sigh of relief all around. The biggest is surely from the Government of India, which was holding onto an asset that was bleeding `20 crore a day. The second biggest sigh was possibly that from its 13,500 employees, many of whom may not have a job to hold on to after the cooling period of one year is done with and Tata restructures its buy. The benign point to consider here is the fact that the airline has been bought by a corporate entity that has possibly the best reputation for both its business and people practices. And the third big sigh must certainly be at Bombay House. The prodigal son has returned.
Sighs apart, it’s now going to be back to business at the house of Tatas. The laborious buying process aside, the Tatas inherit the portly Maharajah who has undergone all kinds of surgeries over the decades, a fleet of 141 aircraft, 13,500 employees, a whole lot of landing rights, a modest debt of `15,300 crore on its books for a start (the larger debt component of `61,562 crore will be borne by the taxpayer) and headaches of every kind, small and big, that come by with a buy of any kind. And remember this buy is in the space of aviation, which is notorious domestically and globally for its burnouts.
The task is cut out for the Tatas. As the Maharajah returns, there are many decisions to take. The first is really that of the core intent, purpose, vision and mission of the Tata aviation foray itself. The group owns chunks of two other airlines already in operation. Both making losses as anyone else in this sector is, as of now. Tata Sons holds 51% in the Tata-Singapore Airlines (SIA) joint venture and 84% in Air Asia currently. While Vistara appears to be the complete competitive inheritor of the legacy of Jet Airways of yore with its full-service avatar and a keen focus on customer experience of the highest quality, Air Asia represents the category of no-frills and budget-airline imageries.
How will the Tatas restructure then? And is it possible to restructure the brands sensibly at all, considering the complex set of aviation rules that govern operations out of and within India? The Tata aviation enterprise today has the choice to be what it wants to be. The ideal route ahead seems to be one that showcases an ambition to be an airline for everyone, with two clear sets of offerings. One in the affordable sector at the bottom of the pyramid with an amalgam effort of Air Asia, AI Express and Indian Airlines, and another at the middle and top of the pyramid with a full-service offering of Air India and Vistara. If wishes were horses, from a pure brand perspective, I would even go on to dream of a clearly demarcated full-service Air India for overseas markets and a Vistara service for the domestic.
How will the Tatas take care and look after the interests of the employees they inherit? How will they deal with the need to refurbish, both physically and in brand image terms the desperate need of brand Air India? How will the inheritance of the fleet be managed? How will orders on hand be managed? How will debt be managed? And most importantly, how will the future be managed?
All these questions and many more lie within the many boardrooms at Tata Sons. Exciting questions that will elicit exciting responses from the best minds in the business of business. As each gets answered and actualised into action, many will surely form part of case studies taught and learnt at the best business schools globally. Let’s look forward to that.
The best thing that the Tata buy has brought back is the brand name itself. Air India is an airline that has “India” as its surname. There can and will be only one Air India, the airline of India. Every image that India represents will belong to this airline, just as every experience on this airline will define the image of India to the uninitiated and the new. The airline of a nation is its calling card in many ways. Air India has the opportunity to be just that, with pride and honour, under a new and professional private boss.
The Maharajah is back. I think the mascot needs to be made the most of. The Maharajah is an asset to celebrate and use. We have no Maharajahs today, and that’s the very reason not to give up on this one. Nothing to be shy of. Time to use him to good advantage and rejig the image of brand Air India, differentiated to the core. This Bobby Kooka and Umesh Rao creation (circa 1946) had Kooka exult then, “His blood isn’t blue. He may look like royalty, but he isn’t royal!”
I disagree. The Maharajah looks like royalty. And now, just now, he has a lot of blue in his blood! The Tata blue!
Harish Bijoor, Brand Guru & Founder, Harish Bijoor Consults Inc (harishbijoor@hotmail.com)