Why did Tata Sons decide to make a comeback after six decades into India aviation market? And what made Tata Sons to get into alliance with SIA? Who made the first move and why?

Tata is a business organization respected inside and outside of India and has become synonymous with nation building. Most of the industries in India trace their beginning to foundations laid by the Tatas, even the first commercial airline in India was started by the Tatas, Tata airlines in 1932. JRD Tata received the first pilot license issues in India, in 1929 and aviation was more than only a passion for him. Initially Tata airlines was only a mail delivery service and later became the largest airline service in India - Air India. Five years later, in keeping with the socialist fervour of the times, the government decided to nationalize the aviation business and JRD Tata was asked to be the chairman of Air India, which he remained for another two decades.According to Ratan Naval Tata, erstwhile chairman and successor to JRD Tata, reentry into aviation industry has been a long-cherished dream of the Tatas to establish a world class airline in India. In 1990s the sector was again opened up for private companies and Tatas managed an alliance with Singapore airlines to get into the sector again. But unfortunately the laws changed overnight and foreign players were not allowed to own a single share in the domestic airlines. According to Maharaj Kishen Kaw, a former civil aviation secretary when Inder Kumar Gujral was the prime minister of India, in his recent book, An Outsider Everywhere: Revelations by an Inside, has said that it was the handiwork of Tata's rivals. "The Tatas had mooted a proposal for a private airline with 40 per cent equity contribution from Singapore Airlines. As this would have been a formidable competitor, Jet (Airways) tried hard to upset rules regarding foreign equity contribution," Kaw wrote.He said that C M Ibrahim, the then civil aviation minister, was not convinced about the Tata proposal. “The minister did not clear the file, despite several attempts on my part," Kaw added. The project was mainly abandoned due to opposition, as well as lack of support from the United Front government, which assumed office in 1996. .In 2010, Ratan Tata had spoken of how he had to abandon plans to launch an airline because he refused to pay bribes to secure the necessary approvals.

So the interest in airlines is not new for the group and when the administration allowed foreign airlines to own stakes in Indian airlines, the Tata group was approached by both Air Asia and Singapore Airlines and both with completely different offerings. The group saw immense potential in both low-cost segment and the premium segment, which Kingfisher (grounded in October 2012) used to target earlier. Even though both are two

different segments, both their partners were best in their respective spaces, which gave the confidence for Tatas to comeback in the aviation sector after six decades. So Tata Sons now hold a 30% stake in Air Asia India, a subsidiary of the Malaysian budget carrier. Vistara is the third full service airlines in India, promoted by Tata sons and Singapore Airlines, and it offers a premium economy class- an emerging segment globally. According to the Tatas, there are two kind of travelers in India, one who is looking for a better travel experience in terms of hygiene and a little extra care during their air travel and there is another kind looking for nothing extra and just for travel between points A and B. So Vistara with its product offering is trying to establish a distinction between a

full-service and a low-cost (carrier). Vistara also has seats in premium economy and business class, which are picking up and will pick up further. So Tatas with Singapore Airlines is trying to capture a segment, which has lot of potential in India and also not much players existing.

References :http://www.business-standard.com/article/companies/the-tatas-flight-story-113022000585_1.htmlhttp://articles.economictimes.indiatimes.com/2015-07-06/news/64142742_1_airasia-india-vistara-singapore-airlineshttp://www.ibtimes.co.in/after-six-decades-tatas-back-aviation-biz-vistara-takes-skies-today-619855http://www.businesstoday.in/magazine/corporate/vistara-chases-small-aviation-market-with-big-ambitions/story/217140.htmlhttp://www.business-standard.com/article/companies/rao-govt-wanted-tatas-to-start-airline-but-backed-out-ratan-tata-115013000006_1.html