After months of no news about how Air India’s divestment process is progressing, the Maharaja was again in the news on Wednesday when a leading daily quoted Akbar Al Baker, Qatar Airways Group Chief Executive, as saying that “about four years ago we did show interest to partner with Ratan Tata (for an Air India joint bid).” Al Baker added that at that time Ratan Tata was not interested.
Today, the Tata Group is one of the bidders for Air India.
In a way Qatar Airways failure in its attempts at tying up with the Tatas to bid for Air India in 2018 could prove to be a blessing in disguise for the airline.
AI is a member of Star Alliance, the largest global alliance of 26 airlines including Lufthansa, Swiss, ANA, Air Canada, United and Turkish. The Star Alliance network currently offers more than 12,000 daily flights to almost 1,300 airports in 197 countries.
On the other hand, Qatar Airways is a member of OneWorld, a competing global airlines alliance which includes 14 airlines including American Airlines, British Airways, Cathay Pacific, Japan Airlines and SriLankan.
Air India joined Star Alliance in July 2014. If a competing Alliance’s airline were to get ownership of the Maharaja, which could have happened if the Tatas had tied up with Qatar Airways and been successful in the bid, then the Maharaja would have had to exit Star Alliance.
Air India tried extremely hard to become a member of the Star Alliance and became a member after almost six years of trying. The Star Alliance membership provides a host of benefits to AI as it does to its other member airlines and their passengers. For example, during the early part of the COVID-19 pandemic AI aircraft flying from Frankfurt to India were used to ferry spares from the Alliance’s headquarters in Frankfurt for an aircraft of a US airline which was stuck at Mumbai airport. Besides, membership of Star Alliance also provides seamless connectivity to AI passengers on its other member airlines across the globe.
Tatas tying up with Qatar and successfully bidding for Air India would have led to other problems for India’s national carrier as well. If a Gulf carrier picked up Air India then ownership and/or control and/or change of control at Air India would have been looked at by the Star Alliance Board on a case by case basis. This is because the three big Middle Eastern carrier--- Emirates, Etihad and Qatar--- popularly known as M3 are looked at with suspicion by many global airlines as there is a feeling in international aviation circles that they are highly subsidized by their states. Though the Middle Eastern carriers deny this, suspicions remain. This would not have been good for Air India which has been besieged by its huge losses and other problems for years now.
During the on-going divestment of the Maharaja, Tata Sons is in the fray and is said to have partnered with Singapore Airlines (SIA). While the Tatas have confirmed their participation, SIA is yet to officially say anything about it. But the joint bid between Tata Sons and Singapore Airlines or Vistara (a joint venture between Tata Sons and SIA) should face no red card from Star Alliance as SIA is one of the founder members of Star Alliance and this takeover will not have a negative impact on AI’s Alliance membership. With SIA having a 49 per cent stake in Vistara a bid being received through Vistara will also face no problems with the Star Alliance Board.