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Ratan Tata’s aviation ambitions a step closer as India opens up
The $100-billion Tata group is a major beneficiary of the government decision to open up aviation, making it easier for start-ups to fly overseas sooner.
Officially at least, Ratan Tata retired as Tata Group chairman in late 2012. In reality, he has been a driving force behind Tata’s bet on airlines and a rare public campaign to open up the booming aviation sector.
The $100-billion Tata group is a major beneficiary of the government decision to open up aviation, making it easier for start-ups to fly overseas sooner.
The decision is no panacea for Tata, whose airlines — Vistara and AirAsia India — have had a slow start in a competitive market dominated by IndiGo and Etihad-backed Jet Airways, both of which opposed the rule change.
Read | Aviation policy cleared: Airlines need not wait 5 yrs to start flying overseas
But it marks a victory for 78-year-old Ratan Tata, and ends more than two years of airlines lobbying, of Twitter rows and of frequent public statements from the usually circumspect steel-to-salt group.
“This was a David-and-Goliath kind of situation,” said a source close to Tata group. “There was huge lobbying from the other side.”
Ultimately, sources said, it was Tata himself, a trained pilot, who was key to sealing the deal.
In a message earlier this year, he called for “a new open market economy” and said airlines lobbying against a rule change was “reminiscent of protectionist and monopolistic pressures by vested interests’ entities who seem to fear competition.”
Officially, though, Tata is not involved. A spokesman for Tata Sons denied he was directly involved, saying he had “nothing to do with operations or management of either of the airlines” after his retirement, and that views he expressed were personal.
Read | Vistara, AirAsia India look to expand fleet size to 20 planes as rules eased
Flying overseas is critical. It means higher profits and margins than the cut-throat domestic market dominated by low-cost carriers.
A Tata Sons spokeswoman said making profit can take several years and the group had a “clear road map”: “Aviation is a long gestation business sector.”
