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aviation | IST

Air India under Tatas will see very good days, says NITI Aayog's Amitabh Kant

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Amitabh Kant said flagship national carrier Air India under Tata Group will see very good days after the Tata Sons won the bid to acquire debt-laden state-run airline.

Niti Aayog chief executive officer (CEO) Amitabh Kant on Friday said flagship national carrier Air India under Tata Group will see very good days after the Tata Sons won the bid to acquire debt-laden state-run airline.
Kant said, "I think the government has undertaken an extremely innovative approach for the disinvestment of Air India. The state-run airline was a very, very complex exercise, and if you have disinvested Air India successfully, then I think the rest of the disinvestment to follow will be far easier."
He added, "One must understand that the per capita usage in terms of aviation is still very, very low in India. It is just 0.1 to say, whereas in the US, it is 2.71 and in the UK is 2.4. So the good days of civil aviation have yet to begin and therefore, I am sure with very good and professional management, Air India will do extremely well. I think India will become the hub of air traffic."
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Rajiv Pratap Rudy, the former minister, said, "One of the best decisions which the government has ever made, for me as a part of the aviation industry, I would say this is a great decision. The aviation industry across the world in the last two years has made a loss of $201 billion. Even in that situation if the company has come forward to bid for it, we must appreciate the gesture. It is an Indian company which has come, it is a company which has a long-standing, it is a company which has gone across the world. So I think it is a phenomenal decision. It is a monumental decision taken by the government."
Ameya Joshi, aviation analyst said, "Air India does have a lot of assets which may not have a tangible value per se but when you look at slots and bilaterals, these are things which have value. If you look at any of the congested airports worldwide be it Hong Kong, London, Heathrow, all these places are slot constrained. Even in Delhi, it is very difficult to get a slot. So the moment you have this combined power together, the Tata Group airlines, now four of them will have more slots in Delhi than IndiGo. With this deal, the market share would be somewhere around 26 percent for the Tata Group airlines."
On capital required to revive the airline, Devesh Agarwal, chief analyst of Bangalore Aviation said, "Last week, I had estimated at about Rs 25,000 crore.  But Tatas will be forced to keep all their India staff on for at least one year, I don't see too much of that Rs 7,300 crore annual loss reducing, so you can add that to the Rs 25,000 crore and Rs 18,000 crore, so the Tatas are looking at least Rs 50,000 crore over the next five years is my guess."
R Gopalakrishnan, former director of Tata Sons said, "It is an emotional moment for everybody in Tata, as this is our little daughter who was born in 1931 when Lord Willingdon was the Governor-General of India, and she is coming back at the age of 89. So it's an emotional moment. In between, our daughter has had many adventures but she is our daughter so she's coming home."
When asked how do you see the process moving forward from here Gopalakrishnan said, "I don't know the details as I'm now retired six years ago. I'm sure my successors and colleagues have done their homework and they have a plan, but it should be in my view, a long and arduous path, but I'm sure it has a good plan."
Mark Martin, founder and CEO of Martin Consulting said, "We are going to see an Air India structured now on the lines of Lufthansa Group AG where you have a parent holding company operating multiple airlines. Lufthansa owns Austrian Airlines, Swiss Air, it has a partnership in Turkey with SunExpress, and so the Air India of now is going to be an Air India with no roadblocks, no stops, no bureaucracy, no restrictions, no financial holdups and no ministerial approval. So this is going to be an Air India driven by extremely passionate Tata."
For the full interview, watch the accompanying video...