Air India, the country’s first air carrier, has almost been synonymous with India’s aviation story. Its journey which can be traced back to the pre-independence era, has seen many turbulent phases, the most significant being its transformation back from a public-owned enterprise to a private entity.
The airline was bought back by the Tata Group in 2022. This move marked a significant shift in the airline’s ownership structure, with the Indian government relinquishing control to private hands, hoping to infuse a fresh lease of life into the debt-ridden carrier. So, with the ‘Maharaja’ now back with its original owners, we bring you a deep dive into the company and how you as an investor can get in on the action.
Air India Company History
Air India has been a prominent name in the aviation industry for several decades. The Maharaja was established in 1932 as Tata Airlines. It got its current name in 1946. Post-independence, in 1953, the government nationalised the airline. For years, the airline enjoyed a monopoly in the Indian skies, connecting the vast nation and serving as its international ambassador.
However, the advent of liberalisation in the 1990s ushered in private airlines, intensifying competition. Financial troubles started mounting for Air India, leading to a burgeoning debt crisis. Despite numerous bailout attempts, the situation worsened, pushing the government towards privatisation. The government eventually sold the airline in 2022, marking a new chapter in the airline’s history.
Air India Share Price and How to Buy
Air India is not a listed entity on the Indian stock market, so it will not be possible for you to invest in Air India shares or check the Air India share price. While the Tata Group has several listed stocks such as Tata Motors, Tata Steel, Tata Power, etc., Air India is not a part of that list. So, even your search for Tata Air India share price will draw a blank as it is not listed on the stock market.
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Now, if you can’t invest in Air India shares, can you look to invest in its parent Tata Group’s stocks as an alternative? The answer to that would also be no, since the Tata Group is a massive conglomerate and has several business interests and listed stocks, and investing in any or all of them should not be considered as a like-for-like alternative for investing in Air India shares.
See Also: When Will Tata Power Share Price Go Up?
Air India Fundamentals
The privatisation was aimed to alleviate Air India’s financial woes, but the path to profitability remains steep. Before we get into the financials, here’s a look at the airline’s other key metrics. The company welcomed 1.04 crore passengers in FY22 as compared to 62 lakh in FY21. Total revenue hours flown in FY22 stood at 2.78 lakh as against 1.73 lakh.
Now, let’s dive into the company’s financials from the past three years.
As is clear from the table above, the company has been struggling, but with the new management in place, it is hopeful of a turnaround.
Factors Affecting Air India’s Performance
Several factors can impact Air India’s performance, including:
- Industry Competition: The aviation industry is highly competitive, with various airlines vying for market share. Air India faces competition from both domestic and international carriers, and changes in the competitive landscape can influence its market position.
- Government Policies and Regulations: The aviation industry is subject to various government policies and regulations that can impact operations, pricing, and profitability. Changes in regulations, taxation, and licensing requirements can affect Air India’s performance.
- Fuel Prices and Operating Costs: Fluctuations in fuel prices and other operating costs can significantly impact an airline’s financial health. As a fuel-intensive industry, changes in oil prices can have a significant effect on Air India’s profitability.
- Economic Factors: The overall economic conditions, such as GDP growth, inflation rates, and consumer spending, can influence the demand for air travel. Economic downturns or recessions can lead to reduced passenger traffic, affecting Air India’s revenues.
Alternative Investment Ideas:
Since investing in Air India shares is not feasible, you can look for alternative investment options within the aviation industry. Investors can consider other publicly listed airlines such as IndiGo and SpiceJet. While Indigo has shown steady growth things at Spicejet have not been so smooth.
The aviation industry has always been considered tough. Over the years, India has seen several airlines such as Kingfisher and Jet Airways shut shop. The latest addition to this list was Go First, which filed for bankruptcy in May 2023.
So, before you make any investment decisions make sure that you are not only well-versed with the company’s fundamentals but also have a wide overview of the industry.
Editor's Note: Artificial intelligence was used as a secondary aid in the writing of this story.
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