The Union Cabinet on June 28 approved the disinvestment in Air India, finance minister Arun Jaitley told at a press briefing. Jaitley informed that the cabinet approved the proposal of the Indian Maharaja’s disinvestment, and also said that the decision has been taken to form a group to work out the modalities of the sale of the stake. This group, under the FM, will study the assets of Air India including hotels and issues like debt. The airline, before its nationalisation, was known as Tata Airlines and was founded by the former chairman of Tata Group, JRD Tata in 1932. Now, Air India has the largest domestic and long-haul fleet of 140 planes in the country and flies to nearly 41 international and 72 domestic destinations.
However, Air India has accumulated mounting debt through the 90s, 2000s, and 2010s, even with its merger with Indian Airlines. After the decision of disvestment and speculations that Tata Group will participate in Air India’s privatisation process, there is renewed interest in the industry. Tata Group, after several decades, re-engaged with the Indian aviation market when it launched an airline, Vistara, in conjunction with Singapore Airlines as well as got a stake in Air Asia. Meanwhile, here is a list of things you should know about Air India, the Indian ‘Maharaja’.
1. The airline, currently, is under a debt of over Rs 52,000 crore and is surviving on a Rs 30,000-crore bailout package extended by the previous UPA government in 2012. The airline has so far received Rs 23,993 crore of the Rs 30,231 crore equity infusion promised by the government under a financial restructuring plan introduced in 2012.
2. The Group formed by the Indian government will decide on the following:
a) Treatment of unsustainable debt of Air India;
b) Hiving off of certain assets to a shell company;
c) Demerger and strategic disinvestment of three profit-making subsidiaries;
d) The quantum of disinvestment.
e) The universe of bidders.
3. Air India Limited is a company that was formed as National Aviation Company of India Limited by the government of India to oversee the merger of Air India and Indian Airlines.
4. Tata Sons set up Tata Airlines in 1932. JRD Tata, the legendary entrepreneur, himself flew the first flight between Karachi and Mumbai. In 1946, Tata Airlines became a public company and was renamed Air India.
5. Tata Airlines also ran commercial operations apart from the usual mail deliveries, often making stops between Mumbai and Trivandrum and then later to Delhi, Gwalior and Bhopal. Six years after its birth, Colombo became the airline’s first international destination charting a growth map few airlines were able to match within such a short span of time. It also conducted several trips during the Second World War carrying refugees from Burma and constantly engaged in the maintenance of RAF equipment.
6. Tata Airlines was born with an initial investment of Rs 2 lakh from Tata Sons and two second-hand de Havilland Puss Moths. In the autumn of 1932, in India’s inaugural flight, Tata himself piloted a single-engine plane carrying 25 kilograms of mail from Karachi to Bombay. The mail used to come to Karachi from England by the Imperial Airways.
7. The company was renamed as Air India Limited on 26 October 2010. It was incorporated under the Companies Act 1956 on 30 March 2007 and was owned by the Government of India. The Company was created to facilitate the merger of the two main state-owned airlines in India: Air India, with its subsidiary Air India Express and Indian, together with its subsidiary Alliance Air.
8. When the government nationalised Air India, JRD Tata wrote to them Prime Minister Jawaharlal Nehru, “I can only deplore that so vital a step should have been taken without giving us a proper hearing. Even more than the decision itself, I was upset by the manner in which nationalisation was introduced through the back door without any prior consultation of any kind with the industry.”
9. Tata had accepted to become the nationalised airline’s chairman when Nehru insisted. Air India kept on doing well under him till he was removed in 1977 by then prime minister Morarji Desai.
10. Air India Logo: The logo of the new airline is a red coloured flying swan with the ‘Konark Chakra’ in orange, placed inside it. The flying swan has been morphed from Air India’s characteristic logo, ‘The Centaur’, whereas the ‘Konark Chakra’ is reminiscent of Indian’s logo”. The new logo features prominently on the tail of the aircraft. Where did the mascot “The Maharajah” come from? Familiar lovable figure first made his appearance in Air India way back in 1946, when Bobby Kooka as Air India’s Commercial Director and Umesh Rao, an artist with J.Walter Thompson Ltd., Mumbai, together created the Maharajah.