Revision as of 22:37, 6 April 2018

Air India: 1932-2017, a brief history; The Times of India, June 22, 2017

History

1932-2018

Abhik Deb, March 29, 2018: The Times of India

Debt and liabilities the buyer will have to take, who can bid, and a timeline for bidding- Air India
From: Abhik Deb, March 29, 2018: The Times of India

It was June 28, 2017 -- when the Union Cabinet gave the 'in-principle nod' to divest the government's stake in the India's national carrier Air India. A gestation period of exactly nine months later, the plan attained fruition when the government offered to sell 76 per cent stake in AI to private bidders.

THE BIRTH OF A 'MAHARAJAH'

Air India's roots trace back to the year 1932- the year when India played its first test match even as the national hockey team grabbed yet another Olympic gold at Los Angeles. The year also witnessed Mahatma Gandhi giving a clarion call to relaunch the Civil Disobedience movement and amid the turmoil, Tata Sons patriarch, JRD Tata founded the country's first scheduled airline- Tata Airlines. JRD, who in 1929 became the first Indian licensed pilot, himself flew the first flight between Karachi and Mumbai (then Bombay). In 1946, Tata Airlines became a public limited company under the name of Air India. The same year, the iconic Maharajah mascot made its first appearance when when Bobby Kooka, Air India's Commercial Director and Umesh Rao, an artist with advertising agency J.Walter Thompson, together created the Maharajah. A few years later in 1953, under the Air Corporation Act, the government nationalised all existing airline assets.

FROM A KING TO 'A BEGGAR'

In an exclusive interview to TOI, Union minister of state for civil aviation Jayant Sinha said that the previous Congress-led UPA government had "reduced Maharajah to a beggar", making a reference to the carrier's debt burden of Rs 50,000 crore. While Sinha's comment makes for fine articulation, it would be a stretch to lay the blame squarely on the UPA government. The story of burgeoning debt and the bid to privatise Air India dates back to almost two decades ago. The idea was first conceived in 2000 when the Atal Behari Vajpayee-led NDA government decided to sell 51 per cent of equity of the erstwhile domestic airline Indian Airlines, with 26 per cent stake to a strategic partner. It also decided to allow disinvestment of 60 per cent of Air India, which was running international operations, with 26 per cent foreign entity stake. The move however was stalled by the then civil aviation minister Sharad Yadav of coalition partner Janata Dal (United). On his part, Jayant Sinha might put up the rebuttal that in 2012, the UPA government, in its second stint at the centre, ruled out privatisation of Air India and approved the infusion of Rs 30,000 crore in Air India till 2021.

In a deja vu of sorts, the latest bid to sell Air India too has run into criticism from the opposition and trade union bodies. But a government keen on economic reforms and free of coalition pulls and pressures means that the deal is likely to sail through this time-- provided it finds buyers. The successful bidder is expected to emerge by September-end.

THE MAHARAJAH'S LEGACY

Bobby Kooka, on conceiving the Maharajah mascot said, "He may look like royalty, but he isn't royal." The line quite aptly captures Air India's genesis- an infant independent India's idea aimed at literally touching heights, despite staying rooted to a socialist agenda of state-owned entities. On what the government will do to retain Air India's identity, Jayant Sinha said, "The brand name Air India will have to be retained...We have ensured AI has an independent existence for at least three years and that it remains a domestic airline with the substantial ownership and control with Indians". He further said that the government will create AI Asset Holding company, which will have non-core real estate and art collection of AI, among other things. The art and artefacts, which the airline has collected over the years will be handed over to the ministry of culture which will, in turn, give them to museums.

As for potential bidders, the Air India saga might come a full circle with Tata Sons-Singapore Airlines having expressing interest earlier. If that deal comes through it would be a homecoming for the Maharajah. IndiGo and an unidentified foreign player are also in the fray. Jet Airways is also reportedly waiting for the bid documents to decide on its next move while Qatar Airways too, wants to start an airline in India.

1950s-1970s: glory days

Joeanna Rebello Fernandes|WHEN THE MAHARAJA WAS GLAM|Jul 16 2017: The Times of India (Delhi)

JRD Tata with crew….high life.

Now reduced to scrimping on meals, Air India was once the pinnacle of luxury travel. A look back at the days when Indians clicked photos with the Maharaja and washed down caviar with champagne The 1950s streets of Bombay glow phosphorescently in the dark as Mitter Bedi bikes from his Colaba studio to the airport in Santa Cruz. He goes into the terminal and sets to work. First in is a clan saying their goodbyes to a Londonbound son. Bedi shepherds them to an Air India logo, encourages them to relax and smile, and shoots. The airline's official photographer, Bedi spends his nights capturing that exotic species -the flying Indian. Air India, which has now been put on the block by the government, stood for something entirely different back then. The brand and product collaborated to give travellers the `magic carpet service', in the words of Bobby Kooka, Air India's commercial director and creator of its `Maharaja'.

Passengers arrived in style, in Chantilly lace saris, sky-high bouffants, doublebreasted suits and Bond Street brogues.First-timers came with families, with garlands and auspicious coconuts for a safe crossing. “People were photographed at the airport because flying at the time was so rare,“ says Sarla Bedi, Mitter's wife, “The photographs would later appear in newspaper supplements and families who desired a copy would have to get it from the newspaper.“

In the early `70s, travel writer Gustasp Irani made his first trip to the US on Air India. “My sister moved to the States, and I was sent a free Economy ticket. Even there people dressed up, and I remember wondering how the scruffy guy next to me managed to get in!' First-time fliers were initiated into AI etiquette with an illustrated booklet called `Better Acquainted', which dwelled on topics like dress-code, ticket cancellation, bathroom manners, and baggage allowance. Sample this: `When you fly with us, it is not necessary to dress like Trader Horn or Theodore Roosevelt on the eve of a visit to the Dark Continent. A safari has its points but mountains of bedding, snack-bite (sic) ointment and Man Friday at your elbow are not required.“

Irani travelled light, with no more than $8 in foreign exchange. So when a trolley selling miniature bottles of alcohol rolled past, Irani had to glumly watch it pass. “I only managed a drink when we were given a voucher, after stopping to refuel in Frankfurt,“ he says.

Naturally, the red carpet was laid thicker in First Class where the water for scotch cascaded from silver carafes. A 1960s First Class menu on the Boeing 707 was a roll-call of the finest: for hors d'oeuvres, caviar Malossol sur glace (Malossol caviar on ice) and pate de foie gras Strasbourg (Strasbourg goose liver paste); entrees included filet mignon. There was a generous cheese platter, and vermouth, sherry and champagne to wash it down.Today , their equivalents are shahi paneer, babycorn korma and palak kofta. Prawn, lamb and chicken are now available only on long-haul flights. Domestic passengers travelling short distances in Economy have been force-fed vegetarianism to ostensibly help Air India economise.

“Food was an important element of our service,“ says Firdausi Jussawalla, former deputy commercial director with the airline. “We had chefs from Centaur hotels (owned by AI's subsidiary Hotel Corporation of India) and the Taj Hotel help plan the menu,“ he says.

The now-much-travelled Gustasp Irani recalls how people lit up their cigarettes as soon as the No Smoking sign went off, which was even before the seatbelt sign went off! If you ran out of sticks, you could buy a carton on board. His sister was an air hostess till she got married (as was the rule until the late `70s), and he remembers the time JRD Tata was on the flight. The chairman (and founder) of the airline called his sister and told her to convey a message to the pilot: `You were six minutes too long on the runway'.

From the '50s to the '70s you travelled Air India in equal parts for the flight and the destination, unlike today, when most airlines are a purgatorial means to an end. “As a passenger you felt so welcome and wanted,“ says Bobby Sista, who helmed Sista Advertising until the '90s. Air India's fleet was growing; having distinguished itself as the world's first all-jet airline in June 1962, a decade later in 1971 it acquired its first Jumbo Jet, the Boeing 747. Sara Kapoor (name changed) joined Air India that year. It was the movie life for young people at the time, a chance to travel the world and live in posh hotels, and shop abroad.

These air hostesses were a glamorous set, some even featured in consumer product ads. A promotional film from 1962 called them `shimmering shepherdesses' and showed them gliding down the aisle in their silks, offering passengers hot towels and boiled candy . “Most of the passengers flying Air India in the '60s and '70s were businessmen, film stars, or people travelling to meet relatives,“ says Kapoor.

Meanwhile, on his return journey from America, Gustasp Irani had about as much luck as on his outward trip. “The Air India flight had stopped in Delhi. My co-passenger, being a domestic traveller, wasn't allowed to buy a whiskey . He requested me to buy two for him, which I did, thinking he'd let me have one. What he did, though, was down the first in one gulp, and then nurse the second.“

Irregularities

2004-14: Purchase of aircraft

Neeraj Chauhan, `Blatant irregularities crashed Air India', May 31, 2017: The Times of India

Airline Bought 111 Planes For Rs 70,000Cr When Its Profit Was Just Rs 100Cr, Reveal CBI FIRs

The Central Bureau of Investigation's three FIRs in the `Air India scam', which took place during the UPA regime, have alleged blatant irregularities that hastened the downfall of the national carrier.

The FIRs, accessed by TOI, said the civil aviation ministry decided to purchase 111aircraft for Air India costing about Rs 70,000 crore at a time when the airline was showing a profit of about Rs 100 crore and didn't have the capacity to purchase even a few aircraft. Due to this particular decision, the airline immediately went into huge losses, which increased every year to reach tens of thousands of crores, the CBI said, quoting from the allegation levelled by activist-lawyer Prashant Bhushan in his PIL before the Supreme Court.

The FIRs mentioned an internal Air India report of 2000-01 which said the airline should only lease aircraft and not go for purchase.The view was overruled by the aviation ministry , the FIR said, quoting from Bhushan's allegations which led the SC to direct a CBI probe.

It was decided in 2004-05 that Air India will buy 68 aircraft instead of 28, as originally planned, a decision which quadrupled the expenditure from Rs 10,000 crore, as originally estimated, to Rs 44,000 crore. This apart, the government also decided to buy 43 planes for Indian Airlines at a cost of Rs 8,399 crore.

“Concerns regarding potential difficulties of Indian Airlines in successfully funding the acquisition process with a positive NPV (net present value) was raised within civil aviation ministry , but were ignored,“ the CBI FIR said, referring to one of the main allegations which led the court to direct the CBI to probe the alleged scam.

Interestingly , the CBI said the acquisition programme had been under consideration since 1996 but never got traction, until 2004 when it suddenly picked up speed. “Between August 2004 and December 2005, the proposals were formulated by Air India, approved by its board, examined and approved by ministry , Planning Commission, department of expenditure, group of ministers and the cabinet,“ the FIR said.

Not just that, Air India signed the contract with Boeing to buy 68 aircraft on the same day , December 30, 2005, that the government cleared the purchase order.

The CBI said NACIL (National Aviation Company of India Ltd), incorporated to merge Indian Airlines and Air India, had an equity base of only Rs 145 crore, yet it made a commitment to pay Rs 44,000 crore for procuring 111new aircraft. It said loans for the purchase were taken from US and Indian banks, pushing the airline into debt and huge losses.

Similarly, the CBI FIR into the leasing of planes said the ministry and officials of Air IndiaIndian Airlines decided to lease planes “dishonestly without due considerations regarding proper route study and marketing or price strategy“.

“The leasing was done despite airline running with very low load because of largescale aircraft acquisition and several flights, especially overseas flights running almost empty at a huge loss,“ the CBI said.

For example, Air India leased 15 expensive planes when it did not have pilots to fly the aircraft, the FIR said, emphasising that this was “known to everyone“.

In another instance of alleged irregularity , Air India dry leased four Boeing 777s for a period of five years in 2006 even when new planes for the airline were set to arrive in July 2007.

This “resulted in five Boeing 777s and five Boeing 737s standing idle, leading to an estimated loss of Rs 840 crore during 2007-2009“, the CBI said.

The third FIR to probe Air India giving up profitable routes and schedules for private airlines alleged that “foreign airlines were given unrestricted entry into India and major routes were given to them without taking any reciprocal benefits“.

Air India gave up Kolkata-Bangkok, Kolkata-Dhaka, Doha-Kochi, Kochi-Kuwait and domestic routes like Ahmedbad-Jaipur, MumbaiVadodara, Pune-Goa and MumbaiPatna and others.

“On all these routes, private airlines like Jet Airways, Kingfisher, Go Air, Indigo, Spicejet, Paramount Airways etc started operating and made profits,“ the FIR said.

On lucrative routes like Mumbai-Dubai and Mumbai-Doha, Air India reduced its flights and gave private airlines major market share, it added.

Longest flights

Delhi- San Francisco: 15,300 kilometres in 14.5 hours

The longest flights of Air India and other airlines, 2016

Saurabh Sinha, AI flies Delhi-SF nonstop over Pacific, and into record books, Oct 23 2016 : The Times of India

Junks Atlantic Route, Covers Longer Distance Than Any Other Flight

Flying Delhi to San Francisco (SFO) over the Pacific Ocean instead of the Atlantic, as it had done till last week, has earned Air India the record of operating the world's longest nonstop flight.

The Pacific route is almost 1,400km longer than the Atlantic one, and the flight covered 15,300 kilometres in 14.5 hours.Despite the route being longer, the flight took almost two hours less thanks to tailwinds -winds that blow in the same direction as an aircraft and thus make it go faster.

“The Earth rotates from west to east, and winds flow in that direction too. Flying west means facing strong headwinds (that decreases an aircraft's actual ground speed), and flying east means getting strong tailwinds, which does the opposite,“ said a senior AI official. “While taking the (western) Atlantic route to SFO, we usually face headwinds of 24kmph. This means that if our aircraft is doing 800kmph, its actual ground speed is 776kmph. Taking the (eastern) Pacific route will mean getting tailwinds of 138kmph, which make the aircraft have an actual ground speed of 938kmph,“ the official added.

At 13,900km, the Atlantic route of AI's Delhi-SFO nons top flight made it the world's second-longest after Emirates' Dubai-Auckland (14,120km). Now, AI's Pacific route will remain the world's longest nonstop for two years, till Singapore Airlines launches the mother of all direct flights -Singapore-New York -that will cover 16,500km in 19 hours (see box). The four pilots, captains Rajneesh Sharma, Gautam Verma, MA Khan and SM Palekar, and the 10 cabin crew members who operated the first Delhi-SFO flight over the Pacific are ecstatic at setting this record.

“The aircraft took off from Delhi at 4am on Sunday (October 16) morning. We were in that date till Japan. After that, we crossed the international date line and were in October 15. By the time we landed in San Francisco, it was 6.30am on October 16 (local time in SFO),“ said one of the pilots.

The AI Delhi-SFO-Delhi flight now does a round trip of the world as it flies back to India over the Atlantic to get tailwinds on both the outbound and inbound flights.

The Boeing-777 200 long range used by AI on this route, on an average, burns 9,600 litres of fuel for each hour of flying. A shorter flying time on the Delhi-SFO route -by an hour in summer to three hours in winter -would mean huge fuel savings for the airline.

Losses and marketshare

On-time performance

2007-16

See graphic:

Air India’s losses, 2007-16

Air India’s losses, 2007-16; The Times of India, August 17, 2017

Losses and marketshare, 2012-17; Taxpayers’ money given to Air India, 2014-18

i) Taxpayers’ money given to Air India, 2014-18;
ii) Air India’s losses, 2012-17; and
ii) Air India’s marketshare, 2012-17
From: January 9, 2018: The Times of India

See graphic:

i) Taxpayers’ money given to Air India, 2014-18;
ii) Air India’s losses, 2012-17; and
ii) Air India’s marketshare, 2012-17

2017: AI starts selling land in 13 cities

AI starts selling land in 13 cities, August 26, 2017: The Times of India

Air India has started to sell its land in 13 cities, including a prime land on Anna Salai here where it was once planning to build its city office. The land will be up for bidding soon. The airline has decided to do an e-auction of properties at Chennai, Bengaluru, Mumbai, Kolkata, Ahmedabad, Goa, Lucknow, Bhuj, Nasik, Pune, Trivandrum, Gurugram and Gwalior. Most of the property are office blocks, land for residential blocks, flats and other assets.

The land and property are being auctioned as part of monetisation of assets plan which kicked in after the Cabinet cleared disinvestment of the airline. “Though the airline may be making money , the loan burden will pull down the value and will discourage investors,“ Aviation minister Ashok Gajapati Raju said.

On-time performance

2016: third worst in the world

AI ranked world's 3rd worst performer, co disagrees Jan 10 2017 : The Times of India

A report published by data services company FlightStats ranked the airline as the third worst global performer in terms of on-time performance (OTP) in 2016.

Personnel issues

Resignation of pilots, 2012-15

See graphic:

Details of pilots who have resigned from Air India as on October 31, 2015

Details of pilots who have resigned from Air India as on October 31, 2015; Graphic courtesy: The Times of India, January 23, 2016