OPINION

Maharajah magic or just another mega mess?

Air India comes full circle with the Tata takeover and now a mega merger is in the works. What will that mean for travellers? Some history and horoscopes and the biggest ever aircraft purchase in history.

by Vijay Verghese/ Editor

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Air India Lockheed Super Constellation with its distinctive triple tail fins. The airline was the first in Asia to enter the jet age with the ear-shredding B707.

IN THE heady 1930s, international mail delivery to India was a complicated and time consuming business. Letters were disgorged in Karachi, then the aviation hub for the subcontinent. As Gandhi's civil disobedience marches roiled the country, mail was laboriously sorted and loaded onto steam trains for dispatch to everywhere from Bombay to Madras.

This was when fledgling entrepreneur and aviation buff JRD Tata teamed up with a storied RAF pilot Nevill Vintcent to start TATA Air Mail in 1932. Vintcent was something of a legend. His heroics in Iraq in the 1920s had earned him a Distinguished Flying Cross after he aided a fellow officer in firing upon — and keeping at bay — attacking mounted tribesmen, by wheeling his grounded aircraft around with the tail hoisted upon one shoulder.

The young JRD and Vintcent took turns piloting various sections of the route using two impossibly small Puss Moths that sputtered uncertainly across the skies. They used a slide rule to figure out directions. Crude navigation aside, flights were often held hostage by monsoon rains that rendered landing strips soggy, and tardy bullocks hauling petrol carts.

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Quartz described things thus: "The infant airline had a staff of two pilots, three ground engineers, four coolies, and two chowkidars, and it did the Karachi-Bombay-Madras run every Monday, stopping for the night at Bellary en route — a 28-hour journey in all. In its first year, Tata Air Mail made a profit of Rs60,000, carrying a total of 10 tonnes of mail, as well as 155 passengers."

Tata Airlines was renamed Air India on 29 July 1946 and went on to become a world leader for its panache and service. It was the first Asian airline to flirt with jets following the acquisition of an ear-shredding Boeing 707. By 1970 it was the first Asian airline with an all-jet fleet.

Not unsurprisingly, Air India caught Singapore leader Lee Kuan Yew's eye in the 1970s as he sought to create a fresh airline that could vibrantly present his island nation to the world. Singapore already had an airline, Mercury Singapore Airlines or MSA, hived off from the joint Malaysia Singapore Airlines (also MSA, and soon to become Malaysian Airline System or MAS). Malaysia had taken umbrage at the use of the MSA acronym and so the renamed Singapore Airlines came into being in June 1972. Mr Lee turned to Air India for assistance. The rest is history. SIA overtook its mentor as a leading world airline. Later, in 2015, it bought a 45 percent stake in premium carrier Vistara, a Tata joint venture.  

{Airline pundits see the merger as a much needed consolidation of the messy Indian air space where small players have proliferated with few solvent....

With the Tata Group back in control of Air India 27 January 2022 — it was disastrously nationalised in 1953 — SIA was once again a logical partner to turn too. Now, a remarkable, if inevitable, merger combining Air India with Air India Express, Vistara (in which SIA currently holds 49 percent) and AirAsia India, will eventuate by March 2024. Singapore Airlines will hold a 25.1 percent stake in the much larger reconstituted airline that is expected to control a 30 percent domestic share of the Indian market. Tata will hold the remaining 74.9 percent. Air India already controls a roughly 20 percent share of international traffic into the country.

Is this jumbo gumbo going to fly? And why did SIA opt for a smaller stake? The second question is easier to answer. After substantial losses at Vistara, SIA now has a slice of a larger and potentially far more profitable pie that offers it access to the Indian market with feeder possibilities for its popular routes to Australia and New Zealand. The airline has lowered its risk in a securely backed undertaking. At the same time it has also agreed to invest US$250m to seal the deal.

An airline statement on the SIA website points to significant synergies. "Air India has valuable slots and air traffic rights at domestic and international airports that are not available to Vistara. With Vistara widely recognised as India’s leading full-service carrier, Air India will benefit from its operational capabilities, customer base, and a strong focus on customer service and product excellence."

Airline pundits see this as a much needed consolidation of the messy Indian air space where smaller players have proliferated with few managing to stay solvent. The new regrouped Air India combined with IndiGo will control an estimated 75-80 percent of the domestic market share.

Air India MD and CEO Campbell Wilson, the former CEO at Singapore Airline's low-cost Scoot, has opted for a fast lease of 36 aircraft "as we finalise plans to refresh and significantly grow our long-term fleet". The airline will need at least US$1bn to revive the brand (US$400m alone is going into cabin upgrades on widebody planes) but its cumulative investment will soon dramatically eclipse this as it gets a lock on about 400 narrow-body and 100 widebody aircraft from Airbus and Boeing. On 14 February 2023 Air India announced its order for 220 aircraft from Boeing and 250 from Airbus. This is the biggest aircraft order ever in terms of volume, and it has sent a frisson of excitement through the beleaguered aircraft manufacturing industry. IndiGo was quick to follow with its own mega-order.

In addition to its creaking fleet of 120 and Vistara's 56 younger aircraft, the new mix will likely include the single-aisle B737MAX and the A321 for Air India Express, with widebody A350s, B787s, B777s for long-haul operations, which are ramping up fast.

As most industry observers concede, Air India's secret sauce in all this is its bag of long-held and under-used landing rights and the ability to offer nonstop services from India to Europe and USA, bypassing carriers like Qatar, Etihad and Emirates, all operating through Middle East hubs. Onetime rival Jet Airways is planning a comeback but for now the coast is clear. As the Indian travel market surges the airline will be uniquely poised to win back old customers with shorter and more direct flights with better service. 

There are headwinds and considerable drag too. Tata Sons undertook to retain all Air India employees for one year after which they are eligible for a voluntary retirement scheme (VTS). This may prove a sticky wicket. The airline could cut about 3,000 of its current 12,000 workforce. Pilot unions have already raised strenuous objections to the hiring of 100 expatriate captains for long-range B777-200LR aircraft and to fill gaps in flying operations. The unions have claimed the new pilots are being offered about 80 percent more than current pilots and their hire would block opportunities for first officers and others coming up through the ranks.

New 40-page grooming rules for cabin crew have had a mixed reception as the airline moves to right its marque and image. Think hair gel for men, dyed hair for the greying, clean shaven scalps for those with balding pates, specified make-up and dress codes for women, no blonde streaky highlights, and deodorant. It's the proverbial new broom. The bullocks have not weighed in as yet.  

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