Vistara — A Dream Come True!

If there is anyone who can be rightfully given the honour of being called the ‘Father of Indian Civil Aviation’ it is the legendary J.R.D. Tata. The house of the Tatas have a long history of association with civil aviation in India. It was in the year 1915 that Tata Sons Ltd started an airmail service between Karachi and Madras. In February 1929, J.R.D. Tata became the first Indian national to be awarded a civil pilot licence by the Federation Aeronautique International on behalf of the Aero Club of India and Burma. In the same year, J.R.D. Tata along with Man Mohan Singh and Aspy Merchant participated is a solo air race between London and Bombay. Thereafter, in 1932, J.R.D. Tata established Tata Airlines and he himself piloted its inaugural flight. In 1946, Tata Airlines was renamed as ‘Air India’.

In 1948 Air India signed an agreement with the Government of India to operate international services under the name ‘Air India International Ltd.’ On June 8 the same year, Air India International inaugurated its international services with a weekly flight connecting Bombay with London via Cairo and Geneva. Air India International was subsequently nationalised in 1953. At this time, Air India International was operating flights between Bombay and London as well as between Bombay and Nairobi. In 1953, the Indian Government appointed J.R.D. Tata as Chairman of Air India International as well as a Director on the Board of the domestic carrier Indian Airlines, a position he retained for 25 years.

Having lost control of Air India post-nationalisation, attempts by the Tatas to re-enter civil aviation was blocked for a variety of reasons. The passage of the Air Corporations Act, 1953, provided the government monopoly rights over the Indian airline industry leaving no possibility for private players such as the Tatas to re-enter this sector. In 1994, in the wake of economic liberalisation initiated by the then Prime Minister P.V. Narasimha Rao, the government repealed the Air Corporations Act of 1953 and replaced it with the Air Corporations Act, 1994, ending monopoly status of the government in the airline industry. As a result, in 1995, a number of private operators ventured into the airline industry and these included Jet Airways Sahara, NEPC Airlines, East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental Aviation and Damania Airways.

In 1995, the Tatas joined hands with the Singapore International Airlines (SIA) and applied for sanction to start an airline. However, the then Minister of Civil Aviation Gulam Nabi Azad, refused to clear any new proposals as he was already facing flak for having accorded sanction for a large number of new players. However, at the end of 1996, under the Deve Gowda’s United Front Government, the Tata-SIA proposal was cleared by the Foreign Investment Promotion Board (FIPB) but was again blocked by the Ministry of Civil Aviation headed by C.M. Ibrahim. Apparently, Ibrahim was opposed to foreign investments of any kind for supposedly patriotic reasons but there were allegations of pressure from some of the existing carriers. In any case, the aviation policy debarred foreign carriers or airport companies from investing into Indian carriers. Indian carriers such as Jet Airways were given six months to divest the equity. Naresh Goyal bought back the 40 per cent stake held by Gulf Air and Kuwait Air in Jet Airways making it the largest full service airline in the country. Effort by Tata-SIA to establish a full service carrier in India unfortunately ran aground.

Subsequently, in the beginning of the last decade, the Tata-SIA had evinced interest in picking up a 40 per cent stake in Air India should the BJP Government that was in power then, moved to privatise the national carrier. However, in 2001, on account of ‘political opposition’ a reason cited by SIA, the foreign carrier opted to back out from the proposal and put paid to the aspirations of the house of Tatas to re-establish their position in the Indian airline industry. With foreign direct investment up to 49 per cent by foreign carriers being sanctioned by the Government in 2013, the Tatas now had a fresh opportunity to make a decisive entry into the Indian airline industry, which they did. The first was the launch of the low-cost airline AirAsia India though joint venture with the Malaysian carrier AirAsia Berhad. This was followed by the long-awaited Tata-SIA venture, now called Vistara that has successfully negotiated all the procedural hurdles and is now set to launch on January 9 of the New Year.

Finally, after years of efforts by Tata-SIA, the launch of Vistara will be a dream come true indeed!