The group is planning a sea change in AI and has enlisted the help of TCS for a technological push.

Tata Sons plans significant changes at Air India to improve its competitiveness in the skies, including cost reductions and operational streamlining. After the government transfers ownership to Tata Sons, new directors will take over the Air India board.

The Tata Group Holding Company, Air India’s parent company, intends to restructure the airline’s debt, renegotiate vendor contracts, and refurbish ageing fleets, among other things. Air India’s current operating model and cost structure will be revamped with the help of other operating companies such as TCS and Taj Sats. According to a Tata Group executive, TCS manages Indian carriers’ IT systems and applications.

“Once the transaction is completed, TCS will take over management of Air India’s IT and digital operations from A to Z.” Air India would become more efficient while spending less on operations and maintenance as a result of this. TCS, a joint venture between Tata Sons and Singapore Airlines, is a critical technology partner for Vistara’s operations. Singapore Airlines also manages the airline’s information technology and digital systems, making it the world’s second-best carrier in this category.

Tata Sons intends to replace Air India’s CEO as part of the airline’s rebranding effort

Saurabh Agrawal and his Tata Sons finance team would also have to address Air India’s business issues by refinancing high-cost debt, reducing lease liabilities, and reestablishing vendor contracts. As a result, the new CEO of Air India will almost certainly be a foreigner. Another source claimed that Tata Sons chairman Chandra Shekhar personally knows many airline CEOs and senior management. Before joining Tata Sons, Chandrasekaran was CEO of TCS, which has a long list of airline clients.

According to the first source, if Tata Sons chairman Chandrasekaran remains chairman of key operating companies, he will lead Air India’s board, with Ratan Tata as chairman emeritus. In this scenario, it is unclear who would lead the Air India board.

When it comes to mergers and acquisitions, the devil is in the details, according to an investment banker who stated that Tata Sons would incur Rs 15,300 crore in debt and have “identified” current and non-current liabilities (M&As). When Tata Sons took over VSNL from the government in 2002, which had retained some equity in the telecommunications company until recently, there was no guarantee from the Centre in the Air India acquisition (like the discontinuation of PSU and Parliament officials to use only Air India for official travel purposes after the change in ownership). Air India’s business would suffer as a result of having to compete for a larger slice of the pie.


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