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Updated: December 9, 2013 21:29 IST

The grounding of Air India: an insider’s view

V. Jayanth
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THE DESCENT OF AIR INDIA: Jitender Bhargava; Bloomsbury Publishing India, Vishrut Building, DDA Complex, Building No. 3, Pocket C-6& 7, Vasant Kunj, New Delhi-110070. Rs. 499.
THE DESCENT OF AIR INDIA: Jitender Bhargava; Bloomsbury Publishing India, Vishrut Building, DDA Complex, Building No. 3, Pocket C-6& 7, Vasant Kunj, New Delhi-110070. Rs. 499.

The very fact that Air India is no longer the ‘Maharajah’ speaks volumes about its present condition. Over the last decade, a series of events and decisions of the top leadership of the once prestigious national (international) carrier has resulted in its virtual grounding. The author, Jitender Bhargava, having spent over two decades with the airline, connected with both its communications and HR, including as its Executive Director, considers this book as his duty by the nation — to tell people from a ring-side view of what went wrong and how.

What began as a private airline, launched by no less than charismatic Indian industrialist J.R.D. Tata, became a national carrier, flying to different international destinations. Subsequently, at late Jawaharlal Nehru’s request, the government took over the airline, but left it to Tata and his professional managers to look after the operations. When Indian Airlines, another government-owned national carrier to take care of domestic operations, was born, the comparisons between the two became obvious and visible.

It was with the seeping in of what is called ‘public sector culture’ in Air India that things really started taking a nosedive. Just because it was government-owned, it became a virtual extension of the Union Civil Aviation Ministry and that remains the main major reason for Air India being unable to take off again.

Bhargava identifies three major events in the recent history of the airline that led to its ‘descent.’ The inability or unwillingness of the government to go in for disinvestment by finding a strategic partner, the massive and ill-advised aircraft acquisition programme, and of course the ill-timed and ill-planned merger of the two airlines. In addition, of course, comes the non-availability of sterling leadership to guide the airline through rough pockets, and the continuing political interference in the management of Air India.

In the late 1990s, there was a proposal by the Tata group and Singapore Airlines to become the strategic partner to provide professional management to Air India. But this fell through, allegedly because of vested interests. Since then, it has run into one financial crisis or another, quite often unable to pay its staff. To find an investor in the present financial health may be impossible.

As for the controversial aircraft acquisition programme, from an original proposal to acquire 28 aircraft, it was suddenly raised to 68, at an estimated cost of Rs. 40,000 crore — sometime in 2003-04.

Obviously, Air India could never really afford such a huge bill and it was up to the government to provide a sovereign guarantee. The airline has still not recovered from this trap.

The worst disaster till date has been the hasty decision in 2006 to merge Air India and Indian Airlines. Even if a professional road map was worked out, it was never implemented with any degree of sincerity. After seven years, it is yet to materialise either in the skies or on the ground, as Bhargava explains.

It is not as though the successive Chairmen/ Managing Directors, or the Union Civil Aviation Ministers did not know about the gravity of the crisis. But they did precious little to solve them.

The government has kept putting in some tranches of capital into the airline — either to pay salaries or to enable it to borrow more. These investments are neither substantial, nor have they come in time to save the airline. The few professional managers who could make a difference in its management left, and the bureaucracy from the Aviation Ministry found in the airline a comfortable posting to take — and they kept their political bosses happy.

This has been the sordid story of Air India’s descent. The Tata group has now tied up with Air Asia, and also with Singapore Airlines to look at two different carriers for domestic and international operations. Several private airlines have come into existence in the country, and some of them have failed. It remains to be seen if Air India, in any format, will become once more the ‘Maharajah’ of the yore and claim its rightful place among the airlines of India, and in the hearts of the burgeoning air passengers.

THE DESCENT OF AIR INDIA: Jitender Bhargava; Bloomsbury Publishing India, Vishrut Building, DDA Complex, Building No. 3, Pocket C-6& 7, Vasant Kunj, New Delhi-110070. Rs. 499.

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Indira Gandhi made a suprise and intelligent appointment when she made
Lala Raghu Raj, then IDBI Chairman, as the new Chairman of AIR INDIA. To my
remembrance, he made great improvement in discipline,financial management
and general up-keep of the Airlines. If is difficult for a Public Sector unit to
compete with new and updated private Airlines like Jet Airways, especially in
decision from lower level right upto the Cabinet. Also, the Unions of pilots and of cabin staff played a negative part. When ITC chairman Deveswar was brought in to
head AIR INDIA, he could not succeed in spite of being one of the most efficient
professional and had to return to ITC. I do not say that it is an easy job, but
devolvement of powers to the higher management might have lessened many
troubles.

from:  T.Vijayaraghavan
Posted on: Dec 10, 2013 at 11:26 IST

This is true, how the merger of AI and IA has effected the Aviation business in India is lethargic. Which in turn has also made other firms in this business cautious. This book is worth reading.

from:  Himanshu
Posted on: Dec 10, 2013 at 10:56 IST

I have travelled a lot with different airlines around the world. I travelled with Air India only twice and decided never to step on that airlines again. One thing that the author failed to highlight is that the airline never realized that in the end "the customer is the king". When compared to other private airlines including the low cost airlines, the Air India has one of the worst in flight services. Not to mention the carelessness in keeping the flight clean and the occasional cancellation of the flights (the airlines decided to cancel one of my connecting flights one day before my flight). When travelling long distances for long hours, these things matter. Since we pay the money we expect some level of service for the money we pay. Just like any other govt office, the airlines don't care about how the tax payers money is spend as long as they get their salary in time. If they are not serious about business and take the passengers for granted, then its better they die!

from:  Rajesh
Posted on: Dec 10, 2013 at 09:29 IST

The way Air India is run by the Govt. speaks volumes of their inability to handle the issue. Many people even now feel that it should have been left to Tatas. One of the many foolish acts of the Govt.!!

from:  R.Ranganathan
Posted on: Dec 10, 2013 at 09:20 IST

The multi-decade descent did not have three reasons. That is a case of getting lost in details. It had only one reason namely government ownership. All else resulted from that.

from:  Ravi
Posted on: Dec 10, 2013 at 07:31 IST

In my younger years, I was a frequent traveler of Air India in
the late 50's, 60's & 70's. I can vouch for the fact that the
airline saw a precipitous decline in the quality of its in-flight
service, staff and general aura, beginning in the early 70's. The
decline was rapid after JRD was unceremoniously shunted out by
the Morarji Desai government. JRD's letters published in in the
excellent book by MS Kohli, "JRD: As Air Indians Remember" are a
sad testament to the fact that even he, a superb leader of large
enterprises was paid scant attention to by the government(s) in
power. In a sense the decline of Air India is a natural result of
the decline of administrative standards in the country. Air India
flourished under JRD, as Nehru gave him the freedom to run it as
he saw fit. JRD responded brilliantly. Today's politicians are
more interested in milking the airline dry, or promoting their
ill qualified proteges to run its operations. Little wonder that
it is on the verge of extinction.

from:  CS Venkat
Posted on: Dec 10, 2013 at 07:07 IST

Air India's Maharajah has lost the turban. It is time for Air India to
hang itself using its turban cloth. The merger of Indian Airlines and
Air India is a nefarious act by the vested interests to make it
impractical for a takeover. Air India and Indian Air Lines have
degenerated as the airline of politicians, VIP's and VVIP's. Hence
there is no problem to funnel government funds to the death bed of Air
India. The ratio of employees in this airline is about 4 or more
compared to any international airline. Does such a white elephant need
government subsidy? How could the government tolerate gross neglect
and mismanagement of an airline? How could the government keep on
paying thousands of millions of rupees every year, with no end in
sight? The only end in sight is the slow death of Air India. But as
long as the airline can give seats to VIP's and VVIP's, the airline
will survive because this airline is a necessity of the privileged in
the country, but not of the ordinary passengers.

from:  Davis K. Thanjan
Posted on: Dec 10, 2013 at 05:54 IST

AIR India was nationalised by Indira Gandhi to take vengence on JDR Tata who did not toe her line. It was not nationalised with the intentions of giving a better airline for the travelling public. Once their purpose is achieved, AI was allowed to rot. Over the time the rot has eaten the Maharajah. The blame must squarely be placed on the concerned Ministry. This is a classic example that how Govt. intervention will kill otherwise a prestigious Airline company.

from:  jayenness
Posted on: Dec 10, 2013 at 05:27 IST

From consumer prospective,
The airline rendered poor service to the consumers. The toilets are not clean, the food is insipid. Most of the travelers dumped the airline for better service and cheaper rates offered by other carriers. Here I would like to pay my homage and preferred if it had a sudden demise than this prolonged waiting in its death bed that inconvenience the travelers with delays and cancellation of flights.

from:  Mohan
Posted on: Dec 10, 2013 at 04:31 IST

If there is one valuable takeaway from this article it is the mention
Prime Minister Jawaharlal Nehru deciding that the Government should
take over Air India. It seems to have been the beginning of the end of
Air India. I have always considered Nehru a great visionary in
choosing the mixed economy model rather than merely Capitalism or
Socialism for India after 1947. One of his stated objectives for the
Public sector was to provide employment for the people. However in the
story of Air India we can see how good intentions can go awry in the
market place. Air India competed in an international marketplace and
customers in that arena do not condone complacency and arrogance.
These qualities are unfortunately a common affliction among public
employees who can never lose their jobs in a hurry not only in India
but all over the world. I always avoided Air India but was once
pleasantly surprised during a trip from San Francisco to Chennai in
2003. Too little too late unfortunately.

from:  Anand Richard
Posted on: Dec 10, 2013 at 04:27 IST
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