With the imminent takeover of Air India by the Tatas and the emergence of a second reasonable sized, a well-funded and credible player in the Indian skies (an entity that merges Vistara, AirAsia, Air India and Air India Express), India’s aviation sector is set to change irrevocably.

There emerges a huge challenge for the leader IndiGo at a time when it finds itself on its knees, like the aviation industry globally. Although IndiGo remains by far the strongest player in the Indian skies, it has never been weaker. The airline has registered huge losses, wiped out all of its cash reserves, has many aircraft idle (as everyone else) and a quiet rebellion brews amongst its commanders and junior pilots—perhaps unjustifiably so—but there it is.

Size can be a huge advantage in normal times but in abnormal or unfriendly times, it can be as much a liability. In accordance with its leader position, IndiGo’s losses are jaw droppingly high—the combined loss for the last six quarters is ₹10,000 crore; it has more aircraft idle than everyone else; it has spare first officers (currently the unhappiest segment in the airline) and is unable to spread its total costs more evenly as it does in normal times. The bigger operation has resulted in the CASK rising inexorably. IndiGo—even by its own admission—is at its weakest ever. It raised a qualified institutional placement (QIP) to help it tide over but many of its management admits the QIP will not hold the key to all its troubles. Many other steps will have to be taken to bring the airline back to its pre-pandemic robustness. The fact that others are in a shakier boat doesn’t change the fact that their problems remain daunting.

A second smaller problem the airline is facing is that there is a quiet resentment and rebellion among its pilots and crew. In some ways, the airline’s initial position of trying to protect the salaries of its staff and handing them the mildest cuts has backfired as the crisis has persisted. As one senior management official says, "The SG and G8 pilots are much better; they are being paid peanuts but still working hard to revive their carriers”. Instead, the rank and file in IndiGo are complaining everyday, saying that their cuts amount to 35-40% of what they were previously taking home and running a constant commentary over WhatsApp where they compare themselves with what the senior management earns. A recent bone of contention is the leave without paydays and the fact that management continues to enjoy “perks, shares and bonuses”.

The management retaliates by saying that they too are subject to similar cuts but unlike the pilots, they have to work on all days. Leave without pay has no meaning in today’s stressful scenario—as one can’t afford to be slack on even one day whereas the pilots actually don’t show up and are free for their own personal work on the days they are not flying. Who then has the better quality of life they counter.

So amidst this chaos enters the possible maneater, the new Tata mish-mish of carriers that could ostensibly topple the IndiGo ship if it gets its act together. That, however—industry analysts and experts say—is a very big if. To begin with, the Tatas have not managed to set a stellar example with their two existing airlines—Vistara and Air Asia. No matter which aspect one looks at, there are more failures and shortcomings in the way the Tata’s have managed thus far. Both the airlines continue to be in the red.

The Tata's have already sunk close to ₹7000-8000 crore and plenty of time in overall management and execution but have failed to get it right on most fronts—be it choice of CEO or the strategy. Almost all the CEOs brought in from either Singapore (for Vistara) or from Malaysia (for AirAsia India) have proved less than adequate—if not disasters—for the carriers concerned. Most have thrown in their towels or have been fired. India is not easy to navigate and Indian aviation is almost impossible for those who are not sons of the soil.

The fact that the country lacks the talent and managerial depth has been evident in IndiGo’s choices in the last many years—right from Bruce Ashby to set up the right systems but even Rono Datta and others to steer it, although the success of IndiGo’s strategy of bringing in talent from overseas remains a matter of much debate. But the long and short of it is that the Tatas will not find it easy to find someone in the aviation industry globally to lead this confused, new entity that is likely to emerge post the Air India buy.

So should IndiGo be worried as this new animal approaches? Ideally, yes, better worry and be alert than be caught napping, but is the newly merged airline that may emerge from Air India’s ashes a threat as of now? Unless the Tatas manage to find a desi superman to lead their new merged entity, probably not.

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