In recent days, the Indian media has been full of news and views about Air India finally being sold to the Tatas. Divestment done. People have also been opining about how this reflects the government’s seriousness about privatization and reforms.
My reaction was: If only it had been allowed a couple of decades earlier, when Tata Sons and Singapore Airlines were both keen on jointly acquiring Air India and turning it around. This time around, news reports seem to suggest that Singapore Airlines was not keen on being part of the consortium to acquire Air India, so the Tatas went it alone.
As the Covid pandemic wanes and countries open their borders to travel, I suppose you could say that India gets to fly a new, overhauled Air India just in time. People across the country have been cheering it for other reasons, most notably for the fact that the airline returns to what was its home and that this is probably the best chance that it has of being revived. I don’t disagree with that, though I have always been circumspect about the Tatas bidding now for Air India for a variety of reasons:
- They already have a sizeable stake in Air Asia, a budget airline and launched their own full-service airline brand, Air Vistara, only as recently as 2014-15, along with Singapore Airlines
- I can’t see yet how Air India fits into their overall business strategy or even airline strategy
- Air India comes saddled with too much debt and other liabilities for the Tata group to take on
- Air India also comes with a lot of baggage – most of which is negative, unfortunately – for even the Tatas to be able to easily dispel
Fortunately, the Tata group has been able to negotiate their acquisition well, making sure that they take on only a small portion of Air India’s debt, with the government hiving off the bulk of it into a special purpose vehicle company. Details on how that debt will be dealt with are sketchy, but it would probably require an asset reconstruction effort. On the personnel front as well, the Tatas will be able to offer most of Air India’s employees VRS (voluntary retirement scheme), which means the company will be able to hire the best industry talent afresh. From what I recollect reading some years ago, Air India had huge unpaid fuel bills as well and owes Indian oil marketing companies thousands of crores of rupees, similar to Kingfisher Airlines when the latter imploded.
That said, I knew that the Tatas would bid for Air India, for sentimental reasons, since the airline was founded by them under the leadership of JRD Tata in pre-independent India and had tasted quite a bit of success in its initial years. The only part of Mr Ratan Tata’s tweet that I agree with is that this acquisition will certainly help establish and strengthen the Tata group’s airline business. In fact, the silver lining is that Air India’s purchase will immediately give Tata’s airline business leadership position in the industry, with the largest market share, the largest fleet, the most connections and routes, as well as prime space at most domestic airports.
Now that the deal is done, what should we expect from Air India under the Tatas? And what can its future be?
A few experts have weighed in on the matter. Gurcharan Das wrote in Times of India that the Tata group ought to probably run only two airlines, eventually: a full-service airline and a budget airline, but he doesn’t quite say which ones to axe. He does say that while the companies ought to be merged, the airline brands ought to stay separate, which I agree with. Harish Bijoor, brand consultant and expert wrote in Business World that Air India should return to its former glory, along with the Maharaja, intact.
In fact, the Indian media have also been full of talk of Air India returning to its former glory. As an advertising and brand communications professional, I wonder what that former glory was in the first place, and how many of today’s fliers in India would relate to that imagery. The Maharaja was an endearing mascot, and I do recollect a few adverts featuring him and his antics overseas. But, as with all mascots, the danger is that the brand gets reduced to the mascot alone and stands for little else. Besides, strangely for a flag-carrier, the Air India adverts focused more on the Maharaja overseas, rather than promoting India as a destination country. Perhaps that is because I saw more of the Air India schedule and new routes announcement adverts (tactical campaigns), than the main brand campaign. It would be good if someone at JWT can dig into their archives and share what the main brand campaigns for Air India were in its glory days.
As an advertising and brand communications professional, I shall also add my two-penny bit to the views on the Air India buy. This cannot be seen in isolation, but in the larger context of the Tata group in the airline industry. Having launched their own airline, Air Vistara, with Singapore Airlines, I thought that the Tatas should have exited Air Asia, especially with all the allegations of corruption and irregular practices at Air Asia that were swirling in the news at the time. However, it is possible that they stayed invested because they wanted to be in the budget airline business as well. Well, as it turns out, they now have Air India Express, to fulfill the needs of that market segment, though the cities that AI Express connects would be quite different from Air Asia, I would imagine.
While the deal catapults the Tata group to leaders in the airline business in India, with all the advantages I mentioned earlier, my view is that Air India needs to add value to the Tata brand, and vice-versa. And an airline brand is much more than fleet, routes, connections and airport slots. According to media reports, the deal also stipulates that the Air India brand must be retained for five years, before it can be transferred, and that too, only to an ‘Indian’! If the Tatas have to retain the Air India brand for five years, does it mean that they have to fly it for at least five years as Air India?
I would prefer to view the entire acquisition from the point of view of the Tata brand and what the Air India brand adds to it. Tatas gain leadership position immediately, but with an airline that is few people’s preferred airline, especially on international routes. An airline that is best remembered for being the great drain of Indian taxpayers’ money for decades. When I say airlines are more than market share, fleet, routes and airport slots, I mean that airlines have the potential to become a symbol of how a country does business and how it welcomes travellers. That is one of the main reasons for countries flying flag-carriers, even if many of them have been privatized over the years, for instance, British Airways. Singapore Airlines itself is an excellent example of what a flag carrier ought to be, while it is state-owned.
In that respect, Air India is an unlikely and poor ambassador of Indian business and hospitality, while some of India’s luxury hotel chains – of which, the Taj is one – do much better. Which is why Air India returning to its halcyon days along with the Maharaja would be a wrong assumption to make. Most Indians – including old me and my aged parents – have no real recollection of what that ‘great’ Air India used to be. And today’s Indian flier is a younger, more connected, and internationally aware traveller.
In fact, that imagery of Air India strikes me as a hackneyed, stereotypical image of India, particularly in today’s context. The land of maharajas, palaces and, well, snake charmers, and the great Indian rope trick, just to complete the picture. If Air India has to succeed, it must chart a new path for itself, one that is relevant to travellers and the India of today and the future. The maharaja probably loses its relevance and will in all probability be its first casualty.
If the Tata brand itself is about maximizing human capital, as I believe it is, then what can Air India bring to the skies? Besides, even if the airline companies are all merged into one entity, does it make sense for the Tatas to run four airline brands – two legacy carriers and two budget airlines? These are the issues that the company leadership will have to think long and hard about over the next few months.
On the other hand, Tata and Singapore Airlines launched Air Vistara in 2014-15 and it has managed to do reasonably well within India, thanks largely to its unique premium economy class of travel. From what I have read so far, it enjoys a good reputation with business travellers and folks from the corporate world, and I am not surprised. These would be the same travellers who would have flown Jet Airways regularly in the past, and now prefer Air Vistara, with its superior service.
However, Air Vistara itself requires a brand strategy and a repositioning, in order to differentiate itself and be seen as a world-class airline from India. I had put down my thoughts and ideas for Air Vistara a couple of years ago, but never shared them. I shall take the liberty to share my thinking on the strategy that I think will create preference for the brand and put it on the international map.
In my recommended brand strategy – of the three alternatives that I share – I reimagine the Air Vistara brand, right from its corporate brand identity all the way to the classes of travel, the brand positioning for the airline as well as the brand communication that will help build the brand. It offers travellers a unique flying experience, based on an insight: when flying, travellers have the most undivided me-time to themselves, and Air Vistara seeks to help them make the most of it. The brand positioning is intrinsically Indian because its essence is Indian, but it has an international and contemporary appeal. You can read all about the brand strategy I recommend for Air Vistara as well as the communication for it by clicking the link below.
Just a few days ago, I happened to see three small (20×2 column centimetres) adverts for Air Vistara in The Economic Times, Mumbai-Goa edition. These appeared on three consecutive right hand pages, for which they must have paid a premium, but I couldn’t understand the point of these adverts. If it was all about starting fares to these three international destinations, then one larger advert could have done the job with greater impact. And even then, one needed a clear message and an idea, which is lacking in this communication.
The brand strategy I recommend aims to differentiate the Air Vistara brand not merely from its Indian competitors, but international ones as well. And it adds value to the Tata brand as well as to brand India, in a way that is Indian but truly international. Much like the Tata group itself.
What to do with the prodigal that has returned? Perhaps, Air India can continue its operations at least for the next five years, with route rationalization between Air Vistara and Air India, especially on domestic flights. That gives the Tatas some time in which to research and plan ahead for what Air India ought to stand for in their airline business, should it be retained.
One possible strategy would be to merge it with Air Asia, now that their Malaysian partner has almost exited the joint venture, as reported widely in media. Unlike the ill-conceived and badly implemented merger with Indian Airlines years ago, this one ought to go better for Air India. It also gives the Tata group time to think about how to reposition the Air India brand.
Either way, it’s time we said our last goodbyes to the Maharaja. Perhaps a fitting goodbye to him would be to acknowledge the one great service to the nation Air India has done in recent times: bringing back Indians from wherever in the world they were stranded, during the Covid-19 pandemic.
The featured image at the start of this post is of an Air India flight by Allen Watkin on Wikimedia Commons