Air India: Murder or suicide?

What happened to Air India? How could an airline that once dominated the Indian skies now come so close to bankruptcy, repeatedly, that the minister of civil aviation was insisting it be privatised?

These questions and more were addressed at the launch of a book The Descent of Air India by former executive director Jitender Bhargava. The book is a collaboration between Bloomsbury India and Business Standard Books. 

Speaking at a panel discussion at the launch, Bhargava said Air India had been an institution - one that benefited from a great emotional connection to many Indians. He said telling the story of how Air India went wrong would upset several lobbies, but he had taken the decision to risk legal challenges and go ahead. "What went wrong, who were the people responsible, and whether there was a conspiracy," he said, were the questions he intended to answer.

Each grandiose plan to save the airline, he said, had only harmed it further, a very unusual case. Thus, he said, the book was a "documentation of misdeeds and misdemeanours," not even been looked into by probe agencies.

There had been sufficient warnings given to the government, he claimed, of Air India's state; but the government had failed to take action. It also emerges in the book that, apparently, the airline's accounts underwent window-dressing for as long as four to five years - so much so, none knew how short Air India was of money till a new chairman stood up and declared, in 2009, it didn't have enough money to pay even its salaries. That was after a company with a Rs 8,500-crore turnover, in a sector with margins of two-three per cent, was buying Rs 40,000 crore of aircraft from Boeing - but the board, in spite of the presence of financial experts, said nothing.

Among the list of odd - and, in some cases, downright harmful - decisions taken by Air India's political masters, one relatively amusing one was described: The management was told the civil aviation minister wanted the airline to offer Kerala's "ayurvedic massages" on board. It was suggested a portion of the aircraft be curtained, so these massages could be offered - and, in spite of all urging to the contrary, the minister maintained this demand. It was only dropped when it was claimed the oil from the massages had so strong a scent it would waft through the aircraft in a very short time.

P C Sen, a former chairman of Indian Airlines before it was merged into Air India, said part of the problem was that, for public sector units, leadership was always a problem. If a chairman was a member of the Indian Administrative Service, for example, they were not really dedicated to the company. He did recall an instance, however, when Russi Modi, a former chairman of Tata Steel, led the Indian Airlines board in refusing to bow to ministerial dictates to detach fare increases from the price of the air turbine fuel.

Sen, recalling the time before the disastrous merger of Indian Airlines and Air India, said Indian Airlines had been ranked 7th in a national brand-equity poll in 2006 (the Taj Hotels were 12th); that very year, the then civil aviation minister had the airline's name changed, vapourising that value. From 2006-07, losses began. Both Sen and Bhargava agreed Air India's descent was not suicide, but murder - a "deliberate design to let this airline sink."