Air India sale: The Maharaja now finds an array of suitors

If the saga of Air India was a Bollywood movie, Monday's newsbreak that the Tatas are set to submit their expression of interest (EoI) would be that climactic 'hurray' moment, where after all the twists and turns, the story seems set for a happily-ever-after ending.

But since it's very much a real life story at the crossroads of business, politics and policy, the hard facts (and reality!) come into play—this is a bloated public enterprise on the brink of collapse after years of being run inefficiently and insufferable losses. The question is whether the branding and a few pluses like the plethora of aircrafts it owns or the plum airport slots and bilaterals are worth taking on the challenge. The Covid-19 tailwinds that has lashed air travel this year and looks set to exert its sway into 2021 does not help matters, either.

Despite that, the saga of India's national carrier at least seems to be looking up finally, with multiple bidders putting in their interests to buy it after several non-starts and delays. After the window to submit the EoI close Monday evening, the interested parties have till December 29 to submit a formal bid, quoting an enterprise value. As things stand now, the government will publicise the final list of bidders on January 5. And if all goes well, a successful winner will soon walk into, no, not the sunset, but a fresh and challenging new beginning with one of India's greatest, yet troubled, brands.

After struggling along for more than a couple of years, the current government's first attempt to sell it off in 2018 came a cropper as no one showed interest, the Air India sell-off now finally seems to be on a home run. That time, the biggest hurdle industry insiders had pointed out was the fact that the sale was only 76 per cent and the government had planned to retain the remaining stake, and by virtue, have a say in the running of the airline. However, this time around, full 100 per cent of both Air India as well as its profit-making subsidiary Air India Express are on sale, along with its full 50 per cent stake in the ground handling unit AISATS.

According to news agencies, Tatas are not the only ones interested—the list includes the Adanis, the Hindujas, and even a bunch of Air India staffers. Then there are the outliers like Ajay Singh of SpiceJet as well as domestic market leader Indigo, with speculation on for the longest time whether the existing airliners would be interested. Taking on Air India could complement their already extensive networks with perks like wide-bodied long distance aircraft and plum parking slots at high-profile global airport hubs like London and New York. Yet, there is always the question whether the immense additional expenditure, not to mention having to deal with a gargantuan and entitled workforce that will come with the purchase, is worth it. None have officially confirmed so far.

The reason why Tata's bid has caused a flurry of excitement is not hard to seek. The oil-to-steel conglomerate was its original owner, with chief JRD Tata launching the airline way back in 1932 with a solo flight from Karachi to Bombay and kicking off the story of aviation in India. Initially called Tata Airlines, it was renamed Air India in 1946, one year before independence.

Even after the Indian government nationalised the airline in 1953, JRD remained chairman of the airline during its heydays of international growth in the sixties and seventies. It is said that when Singapore Airlines was launched, the fledgling company collaborated with Air India to learn world class service standards from the Nariman Point-headquartered enterprise. JRD was ignominiously kicked out from Air India by prime minister Morarji Desai after the crash of its Emperor Ashoka jumbo jet off the coast of Bombay on New Year's day 1978.

In hindsight, the event also sparked off the nosedive of the till-then world class airline, as politicians and bureaucrats got a free hand to exercise their whims and fancies on the glamorous international property. This has resulted in the airline posting massive losses over the years, something an equity infusion of Rs 30,000 crore in 2012 also could not help. For example, in just the three months of April-to-June this year, the airline's losses were around Rs 2,500 crore.

Tatas are expected to route their bids through Air Asia India, a low-cost airline the group presently holds 50 per cent but could take majority control soon as the parent Malaysian operator is lashed by Covid losses. Interestingly, Tatas have another airline player in Vistara, a joint venture with Singapore Airlines (SIA). SIA holds the other half of 50 per cent in Air India's ground handling entity AISATS (Air India's half is up for sale, along with the airline). 

Tata's airport and airline catering business Taj SATS also have the same partner. All in all, a symbiosis perfect to take further, especially considering Tata's passion and legacy for aviation in general and Air India in particular, as well as the deep pockets it has to handhold the loss-making business through what would undoubtedly be a turbulent phase post-sell off.

A bunch of Air India staffers have also put in an offer, led by the airline's commercial director Meenakshi Mallik. Beside a Rs 1 lakh corpus each being chipped in reportedly by 209 existing employees, the group claims to have a financial partner who will put in the rest. Interestingly, the pilots' and cabin crew unions have advised their members to desist from joining this consortium.

There has been no official confirmation from any of the parties nor the government. Government sources have hinted that the final bid details will be revealed by the Department of Investment and Public Asset Management. That would mean no official confirmation on who all are in the running for a loss-making, yet prized, national treasure likely till January 2021. More than a Bollywood piece, Air India's saga seems more like a thriller web series we will have to await a further season before finding out the denouement.