Is it the Homecoming of the Titan?

"Welcome back, Air India," tweets Ratan Tata after the Tata Group triumphs the national carrier bid. The salt to software conglomerate reacquires the government-controlled airline for about 68 years for INR 18,000 crore. The airline's prolonged debt laden that has escalated to INR 61,560 crore has urged the government to call for a bid not less than INR 12,906 crore, which resulted in the nation's maiden airline to return to its homeowner. 

Birth of Air India

In 1932, JRD Tata established an airline Tata Air Service and obtained a contract to carry mail via small aircraft between Karachi and Mumbai. The airlines' success attracted an ex Royal Air Force officer, Nevill Vintcent Tata's friend, to help him commence a commercial airline service. Thus, in 1937 India's first air service took birth as Tata Air Services. The airline had a very subtle start with an initial capital of just 2 lakh. 

Its first domestic flight was between Bombay and Trivandrum with a Miles Merlin that has a six-seater capacity. In 1938, Tata Air Services was renamed Tata Airlines. However, its success was unbelievable, the flight operation between Mumbai and Delhi expanded and grew exponentially, and there was no looking back for Tata Airlines. In its first year of operation, the airline soared about 260,000 Km and lifted about 155 passengers and 10.71 tons of mails which brought in a profit close to 60,000.

The transition from Tata Air Service to Air India

Post the Second World War, the commercial services was returned to India. Subsequently, Tata Airlines was urged to turn into a public limited major thus, on July 29, 1946, Tata Airlines was again renamed as Air India. After obtaining its independence, the Indian government brought about 49 percent of the airlines under its control, following which a Lockheed Constellation L-749A flew from Bombay to London. This was the airline's maiden international flight. 

In 1953, the Indian government passed the Air Corporations Act and procured a major stake in the carrier from Tata Sons yet allowed its founder J. R. D. Tata to continue as Chairman till 1977. During the period 1948 to 1950, Air India rolled out services to Nairobi in Kenya and to major European destinations Rome, Paris, and Düsseldorf. It further took delivery of its first Lockheed Constellation L-1049 and inaugurated services to Bangkok, Hong Kong, Tokyo, and Singapore. The airlinesold three A300s in March 2009 due to debts. In January 2013, Air India cleared some of its debts by selling and leasing back the newly acquired Boeing 787 Dreamliners. Also, the airline posted its first positive EBITDA after almost six years. Air India joined the Star Alliance in 2014. Pictured is Air India Boeing 787 Dreamliner (VT-ANU) in special Star Alliance livery.

In 2000–01, attempts were made to privatize Air India again. However, in 2000, Air India rolled out services to Shanghai, China. On May 23, 2001, the Ministry of Civil Aviation accused Michael Mascarenhas, the then-managing director on corruption. As per to the ministry reports, the airline faces a lose estimated to be US$8.0 million due to the extra commissions that Mascarenhas approved, and however he was suspended from the airline. In May 2004, Air India introduced a wholly-owned low-cost subsidiary named Air-India Express, to connect cities in India with the Middle East and Southeast Asia. Until 2007, Air India completely operated on international long-haul routes while Indian Airlines executed on domestic and international short-haul routes.

Air India attracting over 60k cr debt

In January 2020, Air India EoI drifted by DIPAM , of the airline's total debt of 6,590 crore as of August 31, 2020 the buyer would need to absorb 23,286.5 crore and the remainig would be transferred to Air India Assets Holding Ltd (AIAHL), a particular purpose vehicle.

Air India continued to be at losses post its merger with domestic operator Indian Airlines in 2007. The airline would give the successful bidder control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports and 900 slots at airports overseas.

Alongside, the bidder would get 100 percent of the low-cost arm Air India Express and 50 percent of AISATS, which offers cargo and ground handling services at major Indian airports. The airlines’ uncontrollable debt has urged the government to opt out for a bid which was successful won by Tata Sons over the other competitor SpiceJet Chairman Ajay Singh who has quoted 15,100 Crore.

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