As Tata Group take back what (Air India) once belonged to them, the talks on the future of India’s aviation industry become more popular and commoner online, on social media, and in cafes, with an increasing number of people discussing about it and cheering the takeover. The news has been trending on social media this entire week with interesting memes and pride stories in favour of Tata. Not just ordinary internet users, but also brands like Amul, which is known for its out-of-the-box humorous storytelling, are also applauding and welcoming Air India’s return to its original founders in their own inimitable way. The dairy brand tweeted a doodle with its Amul girl saying, “Tata Good Buy!” while Ratan Tata is shown sitting next to her in an Air India flight.
People cheering for a public enterprise being sold to a private company is something I have not seen in recent times or at least to this extent. In general, I’ve observed that when a government unit is sold to a private corporation, people express disappointment, or if not disappointment, at least mixed reactions. The Opposition — whoever – generally raises a ruckus over such buyout deals. However, the story and the emotions of common people have completely changed with Tata buying of Air India. People are ecstatic as if Tata has liberated Air India from the clutches of the government and finally the airline has seen the light of the day. Of course, this is a historic moment for the Tata, and it will be a rare pride for the Group to own and run the country’s flag bearer airline once again up in the sky.
What most of us know that Tata acquired Air India for Rs. 18000 crores, but many of us don’t know about the entire package Tata got through this deal. By purchasing the Indian government’s 100% ownership in the debt-ridden airline for only Rs. 18,000 crores, Tata has now control of Air India’s 4,400 domestic, 1,800 international, and 900 international landing and parking slots at domestic airports, including one in London, UK. Along with the airline, the Tata have also acquired a quarter of Air India’s total dues of Rs. 615 billion.
With Tata’s takeover of Air India, the horizon for the Indian aviation industry should change as the company plans to take aggressive steps in its commercial aviation businesses. Besides Air India, the Tata already have an 84 percent stake in AirAsia, 51 percent stake in Vistara with Singapore Airlines holding the remaining 49 percent. However, the competition is going to intensify manifold for the Tata Group and Air India with Jet Airways’ already making headlines for a relaunch next year under a new leadership team and with a promise of services that are unrivaled in the country so far.
At the same time, the country’s leading private airlines Indigo and SpiceJet’s stocks are skyrocketing. The domestic tourism and travel, including business travels, is experiencing a resurgence because of increased unlocking activities by the government, and the majority of these travelers are opting to travel by flight and that’s one of the reasons why the market is bullish on aviation stocks these days, and we have already witnessed the aviation stocks rising this Monday.
Furthermore, Go Airlines’ Rs. 3,600 crores initial public offering (IPO) has already been cleared by the Securities and Exchange Board of India (SEBI) yesterday and the airline, now rebranded as GoFirst, hopes to generate up to Rs 3,600 crore through the sale of shares, as per media reports. To add to the rising competition, SNV Aviation that would fly under the brand name, Akasa Air, has got No Objection Certificate (NOC) clearance from the Ministry of Civil Aviation yesterday only and plans to start operations from the summer of 2022. In a nutshell, this will be an interesting space to watch out for consumers since higher competition results in more benefits for the consumers.
Views expressed above are the author’s own.
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