A homecoming: On Air India and the Tatas

Tatas will find turning around Air India tough with high fuel costs, travel hit by COVID-19

The Centre, for its part, can finally heave a sigh of relief at having successfully exited the commercial aviation space, a high-cost industry that most governments around the world have left in the hands of private carriers so as to ensure taxpayers’ money is deployed more meaningfully in social and strategic sectors. After having ploughed in more than ₹1-lakh crore of capital in the past decade alone and seeing Air India suffer a daily loss of over ₹20 crore, the Government’s desperation to cut its losses and close out a fire sale is understandable. The pandemic’s impact on public finances and the carrier’s operations, especially given the devastating impact on air travel both domestic and international, is sure to have helped spur the Government’s decision to agree to not only absorb 75% of the carrier’s debt, but to also pick up the tab on medical benefits for former employees. And in a bid to protect the interests of the more than 13,000 permanent and contractual staff at the airline and its unit, the government has bound Talace to ensuring there should be no job cuts for at least one year. Still, integrating the state-run carrier’s sizeable workforce is going to be one among the many serious challenges, awaiting the Tatas. To turn around Air India at a time of soaring fuel costs and COVID-hit air travel, is sure to test the conglomerate’s managerial mettle.

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