GIVEN domestic passenger traffic grew just 1pc in Q1FY14 after three quarters of contraction … and how many airlines have been run into the ground in India and overseas, the new Tata airline venture comes as a surprise. More so since the proposed JV with Singapore Airlines is a full-service one while the Indian market is dominated with low-cost carriers controlling over 61pc of the market….

That a group like the Tatas sees things differently, of course, is welcome since it shows no lack of confidence in the country’s medium-term future; indeed, others like Etihad that has just signed up with Jet and the likes of Qatar who are lining up for more bilaterals show a similar confidence in the market’s potential … even though the immediate short-run looks bleak. Apart from banking on Singapore Airline’s great brand name, the business is no longer as capital intensive as it once was since aircraft are available on lease — lease rentals account for 65-70pc of costs.

But not being capital intensive doesn’t mean the business doesn’t require deep pockets, particularly when there is so much competition. Which is why it is curious the Tatas are venturing into this space when so much of the group, under a new chairman, needs fixing. … [W]hile preparing for take off … Cyrus Mistry needs to clean up the group’s financials…. And pay heed to Ratan Tata’s dictum that if the group is not among the top three in the industry, does it need to even be there? — (Sept 21)