Air India: Back in The Hands of Tata Group

On the morning of October 9, 2021, almost all newspapers in India carried the news of the re-privatization of Air India. They celebrated the move by the Government of India to hand back the airline to its original owner, the Tata group. Tata Airlines was founded in 1932 as India’s first airline. The Government of India nationalized the airline in 1953. In October 2021, nearly seven decades after its nationalization, Tata Sons and the Tata group, through its wholly owned subsidiary, Talace Private Limited, acquired Air India again, bringing a halt to the years of effort by the government to re-privatize the national carrier. The re-privatization gave the Tata group full control of Air India and its low-cost airline, Air India Express, and a 50 per cent stake in Air India SATS Airport Services Private Ltd (AISATS), the airport and cargo-handling service company. <br><br>However, the restoration of Air India as a renowned, profit-making airline was an uphill battle accompanied by myriad challenges. The Tata group ran two airlines in India: Tata SIA Airlines Limited (operating as Vistara), in which it held a 51 per cent stake; and Capital A Berhad (operating as AirAsia) with an 80 per cent stake. In financial year 2020–21, both airlines incurred significant losses. The responsibility of rebuilding Air India at such a precarious juncture could have become yet another adaunting task for the Tata group. Did the Tata group make the right move by acquiring Air India? What should the Tata group do to make Air India regain its lost glory, and how should it prioritize what needed to be addressed to achieve this? How could Air India overcome the industry- and company-level challenges it faced?

This case is suitable for graduate- and executive-level courses. The case is ideal for teaching students about blue ocean strategy and its application in making a strategic leap in a competitive environment. The case is also suitable for discussion on value/cost trade-off and the leadership qualities required to turn around a business, and it provides an opportunity to understand the issues involved in turning around a company. After working through the case and assignment questions, students will be able to<ul><li>understand the complexities and uncertainties of acquisition and integration with an existing business;</li><li>appreciate the process of business integration with the acquired firm;</li><li>understand the application of the blue ocean strategy for turning a business around; and</li><li>assess the value/cost trade-off in turning around a business.</li></ul>

• Turnaround of a company
• Acquisition
• Blue Ocean Strategy
• Public Sector organization
• Emerging Markets