As things stand, Tata Sons now owns 49 per cent in the airline, as does Malaysia's AirAsia Berhad. A third partner - after a shaky partnership - has finally exited the venture.
The Tata Sons stake increase comes as quite a surprise to many in the industry for a variety of reasons. One, AirAsia India's performance record so far has been less than impressive. The airline has failed to stick to most of its commitments. It had planned to add one aircraft per month - as per its initial claims - but it has managed to reach a fleet of six planes in close to 22 months (first flight was in June 2014). Its market share remains the lowest in the industry. Routes, slots and timing have often seemed more ad hoc than planned. Flight cancellations have been common. Fliers, who were initially excited by a new product and the low fares, seem a bit wary now.
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Time and again the management of the airline has announced that the airline would break even soon and even turn profitable but it hasn't happened. Most quarters have been loss-making, although the December 2015 quarter did see the loss narrow a bit.
The airline's consistent losses came at a time when any disciplined airline company would have been able to make money with fuel prices as low as they were. Aviation experts argue that if an airline is struggling in the present scenario, it may need to look internally to figure where it is going wrong. With the experience of AirAsia Berhad at its disposal and the timing (in terms of oil prices), one would have expected AirAsia India to fare better.
A second reason why people are surprised at the Tata stake increase is its lack of involvement so far in the way the airline was run and managed. While holding board representation, it had acted as a silent partner. Industry sources are surprised at what they perceive as almost "blind faith" in Tony Fernandes' ability to deliver - considering AirAsia Berhad has diversified into many markets with pretty mixed results.
If Tata Sons was indeed committed to the venture, it has been less than apparent. As a former Tata official put it, the present chairman, Cyrus Mistry, has been "curiously silent" on controversies (interestingly, controversies have arisen only with this venture; Tata's other alliance with Singapore Airlines has been pretty smooth so far) related to the venture and it is former chairman Ratan Tata who has stepped in time and again on AirAsia India's behalf. Mistry met passengers on the day of Vistara's inaugural flight from Delhi to Mumbai but no such ceremony was held in the case of AirAsia India.
On hearing the news of the stake increase, I messaged a senior Tata official asking whether Tata Sons was consolidating its stake to sell out to a single buyer - speculation to this effect was rife. His answer was a "no" in capital letters.
Ever since the airline took to the skies, it has been a pretty rocky road for its senior management. There have been frequent changes in the core team with many pointing a finger of blame at Fernandes' style of management. People say that AirAsia India is operating more as a subsidiary than as an affiliate with key - and everyday - decisions being made in Kuala Lumpur. A senior team member, who quit after months of frustration, told me: "You cannot run an airline in the competitive Indian market in absentia - sitting in Jakarta or Kuala Lumpur."
Last month saw the exit of the airline's CEO (he'd been there since inception), on the heels of the exit of its CFO in August 2015 (also a start-up team member). Again, in what came as a surprise, the airline announced a new management team with very little collective experience in running an airline in India. Fernandes has long held the view that aviation experience is not necessary to run an airline and that those with an outside view can do it better.
Will a new team be able to reverse the fortunes of Fernandes's latest adventure? The answer, many argue, lies with Fernandes himself.