Air India, a name that most Indians can relate to as the country’s flagship carrier, has a storied legacy that stretches back over 90 years. Once a symbol of excellence under the Tata Group, today it finds itself at a critical crossroads, especially after the devastating crash in Ahmedabad that claimed the lives of over 270 people.
The airline has witnessed different phases of transformation from being a pet project of JRD Tata to being burdened by debt for decades under state ownership. The Tatas finally managed to bring the ailing airline back under its fold after 69 years in 2022.
Early days of the Maharaja
Founded in 1932, as Tata Airlines by J.R.D. Tata, its first scheduled service was inaugurated by moving passengers and mail between Karachi, Ahmedabad, Mumbai, Bellary, and Chennai. Routes were soon extended, however, after World War II it went through it’s first change. In 1946, Tata Airlines was converted into a public company and renamed to Air India Limited.
In 1953, India nationalized all airlines, creating two corporations—one for domestic service and the other for international services. It was called Air-India International Corporation and later abbreviated to Air-India in 1962. In that same year, it became Asia’s first all‑jet airline by introducing the Boeing 707 to its fleet.
Ballooning debt
The opening up of the aviation sector to private players in 1994-1995, sparked a massive change in the dynamics of the aviation sector in India. Air India struggled to remain competitive. Despite a significant loss in market share, the corporation was kept bloated with an oversized fleet and headcount for the next several decades.
By 2000-01, the NDA government under Atal Bihari Vajpayee tried to bring in private players again to assuage the situation. They tried to divest 40% stake in the airline, but the plans were derailed. The subsequent 10 years of Congress-led UPA governments did not pursue any privatization agenda.
The airline suffered a significant setback after merging with Indian Airlines in 2007, as the combined entity failed to generate a profit following the merger. By March 2011, Air India had accumulated debt of ₹426 billion and reported an operating loss of ₹220 billion.
Air India’s ‘Gharwapsi’ moment
It was finally in 2021 that Ratan Tata announced the acquisition of Air India by the Tata Group, following a government auction. The airline was officially taken over on January 27, 2022, for an enterprise value of ₹180 billion, which consisted of a payment of ₹27 billion in cash and the takeover of the remaining ₹153 billion debt.
And with a majority stake in AirAsia and a joint venture stake in Vistara, the deal made the Tata Group the second-largest domestic carrier and the largest international carrier in India. The billions of dollars deal was in some ways a homecoming for Air India, which, as a public entity, was drowning in debt, mismanaged by bureaucrats, and needed immediate revival.
A new identity and the entry of Boeing
As part of the Tata Group’s transformation and rebranding effort, the carrier got a new brand identity with a new logo in August 2023. It was also during this time that the airline placed an order for a total of 470 aircraft from Airbus and Boeing, at an estimated value of $70 billion based on the listed prices. The airline’s CEO Cambell Wilson, said that they had spent around $400 million to refurbish aircraft since its takeover. And it wasn’t just the planes that got a makeover, even its crew wore a new look, with Indian designer Manish Malhotra, revamping the uniforms for its cabin staff and pilots by December 2023.
A series of mishaps & fines
In 2010, an Air India flight arriving from Dubai overshot the runway in the city of Mangalore and plunged over a cliff, killing 158 people out of the 166 on board. In another incident, a flight for Air India Express, a subsidiary of Air India, skid off a runway during heavy rain and broke in two, killing 18 people and injuring more than 120 others. Both of these incidents involved an older Boeing 737-800 aircraft model and occurred while Air India was still under government control.
In January 2023, Air India faced criticism and a $35,000 fine from the country’s aviation regulator for its handling of an unruly passenger on a flight from New York to Delhi who urinated on his co-passenger. By March 2024, the Directorate General of Civil Aviation (DGCA) once again fined the Tata Group, this time for ₹8 million ($93,000) for violating flight duty time limitations and fatigue management systems of its flight crew. The regulator found that the airline’s crew didn’t get adequate rest before and after ultra-long flights or layovers, violating revised rules.
In the wake of the deadly crash in Ahmedabad, the regulator has asked Air India to conduct safety checks on all of its Dreamliner aircraft. The airline has said that it has completed enhanced checks on 22 of its Dreamliners and has 11 more aircraft to audit. These inspections will focus on things like take-off settings and engine controls.
So even as investigations unfold, it brings to the fore Air India’s turbulent journey, where legacy, ambition, and accountability are seen colliding.
