Govt must return Air India to Tatas: Jitendra Bhargava

After AirAsia India, Tata group has now entered into an agreement with Singapore Airlines to start a full-service carrier in India.

Speaking to CNBC-TV18, Jitendra Bhargava, former ED, Air India says it’s a welcome development considering Tata Sons are the pioneers who once created Air India. However, he says there are already too many carriers in India struggling to survive and therefore, the government instead of allowing a new carrier should allow Air India to be brough into the new entity.

”It would be in the fitness of things that Tata Sons get back what they created and second Air India will have a future with the new entity in place,” he adds.

According to Bhargava, government must now consider the option of giving away Air India to its the new owners under Tata Sons as creation of new airline will only make survival difficult for the existing airlines.

Below is the verbatim transcript of Jitendra Bhargava’s interview on CNBC-TV18

Q: Tata Sons looking for a new aviation foray in the full service carrier space, what is your reaction to this news?

A: It is a welcome development considering that Tata Sons were the pioneers. They were the ones who created Air India. They have explained that you have Air Asia India in which they have a stake to be the low cost airline and Tata Sons and Singapore airlines will create an airline to serve as a legacy carrier – full service carrier.

Welcome news, though the question would be that there are already too many carriers in India struggling to survive. The government of India instead of allowing a new carrier to come in should handover Air India to the new entity. It would be in the fitness of things that Tata Sons get back what they created and second Air India will have a future with the new entity in place.

Q: Do you want Air India to be brought into this new entity?

A: Yes, because Air India without foreign collaboration, the kind of pitiable financial state it is in, it will be a graceful exit for Air India. Air India will get a fresh lease of life and in the hands of Tata Sons who were the original creators of the airline.

It will be poetic process and will be welcome step from Air India's perspective. Also, creation of a new airline will only make position, survival difficult for the existing airlines.

Q: Are you advocating privatisation to a certain extent for Air India?

A: Absolutely. If one has to improve Air India's position from perspective of a bright future this appears to be the only way out.

Q: Do you think there is space for one more full service carrier in the Indian aviation sector at this point?

A: A carrier can certainly come in a new airline, but it will be at the expense of another carrier. Another carrier may meet the Kingfisher's fate. So if government is to take a total comprehensive view of the civil aviation industry, with Tata Sons expressing an interest in setting up an airline, I am of the firm opinion the best course to serve civil aviation sector would be what I just stated, let Tata Sons and Singapore Airlines entity get hold of Air India, something they tried in 1999, but did not succeed.

Q: Tata Sons is clearly betting big on aviation. There is the Air Asia deal which is in the LCC carrier space and here they are going in with Singapore Airlines for a full service carrier. What do you make of this move itself?

A: If Tata Sons perspective is to be taken and knowing fully well that the government has not allowed FDI in Air India as per its policy announcement in September 2012 that they would have certainly thought of creating a new airline.

I am only adding a new dimension to it by saying that the government in view of this new development taking place must consider the option of Air India having the new owners under Tata Sons.