Companies & Sectors
Economy & Nation Exclusive
Air India will disappoint with the 787s

Clearly, spanking new planes are not just the only thing Air India needs, but a professional and experienced airline management team is needed, as well. It needs a strategy rather than random decision making, otherwise, Air India will keep fishing for one-off travellers due to its low fares, but will not be an airline of choice

As a keen follower of aviation events, I landed up in Hyderabad last week for a day trip, with the main intention being to explore the much talked about Boeing 787 planes that Air India (AI) is lucky enough to get an early delivery on. India Aviation 2012 was on, and the Boeing Company brought the plane, which is almost ready for delivery to Air India, painted in the AI colours to showcase to the Indian audience and media. This new airframe which was developed from scratch to provide lighter weight of the plane and save about 15% fuel, Boeing has about 800 planes already on order, and AI will be one of the first few customers to receive these planes in the world, after All Nippon Airways of Japan received theirs in the last few months of 2011.

And still, I am disappointed that Air India will botch it up almost from the word go. I waited for a couple of hours to get my turn on the plane, as the bureaucrats and friends of Air India walked by me into the plane to be demonstrated on the breakthroughs in passenger aviation. I walked around the plane and from the outside, it looked royal. But as soon as I walked in, my heart sank because Air India did manage to disappoint, yet again.

Let’s go back a couple of steps before so that I can make my case. The airline product is basically not just the functional service of “how fast and conveniently you can get there”, but also the experience of getting there. Different airlines go about doing different things to make their passengers feel welcome and comfortable, and the longer you have to be in a metallic tube that flies without the option of change of scenery; the more the flying experience starts to count. Swiss Airlines gives away chocolates to say thank you and Lufthansa boasts of a special terminal for their First Class customers if you are flying at their Frankfurt terminal. Bottomline is that airlines invest a lot of money in developing a product that they hope will bring repeat customers, sometimes for the food, sometimes for the quality of the seat and sometimes for the in-flight entertainment system.

With AI, they had a golden chance to break through their staid image riding on these new planes. Air India’s perception amongst the frequent flyer community is that of an irregular airline which does not treat its passengers well. It gets you there, yes, but that’s about it. With comparable or cheaper prices to travel outside the country and offering a better quality of service, carriers outside the country have been able to gain their marketshare from AI. After all, if you got a better service and could take out the Air India stigma, why wouldn’t you go with the other carrier? 

But what Air India did was totally different. I hazard a guess on what happened. In typical bureaucratic fashion, Air India called tenders for installing seats and inflight entertainment products, and went with whatever perhaps was the cheapest; with no regard to design or aesthetics. Another airline, Germany’s Lufthansa, on the other hand, spent 3 billion euros to develop new seats for their business class passengers which they showcased in March 2012, as well. In the process of matching up the colour scheme with the Air India colours, some babu ordered rust-orange and red upholstery for all the seats, and designed a 238-seat large economy cabin on the 787 that looks like it was already used for 10 years before even flying one commercial flight.

People who will pay more money, up to five times more, to travel business class will be disappointed a bit, too. The airline has installed nice comfortable seats in those same orange and red colours upfront. Here, they’ve overlooked other finer ergonomic design aspects. Again, my argument is that these premium travellers would be disappointed and would not come back, or perhaps would choose to fly another airline which will offer them a similar price but a better experience. So, by not investing in making flying a memorable experience, Air India won’t be able to get out of this loss-making black hole because they are giving no reason to the flyers to do so.

The other aspect that will let AI down the loss making path is poor network planning and revenue management. Unconfirmed reports state that Air India will perhaps fly its first international flights on these planes on the Delhi–Melbourne route. This is a route they have been trying to launch for the longest time, but have been unsuccessful. Their direct competition on this sector would be Qantas, which after operating Mumbai–Sydney direct flights till 2010, withdrew from the market since it was losing about $20 million per annum on that route. 

Clearly, spanking new planes are not just the only thing Air India needs, but a professional and experienced airline management team is needed, as well. This airline needs a strategy rather than random decision making, and some experts who can make sure the full potential of the tools at their hand are made useful. Otherwise, Air India will keep fishing for one-off travellers due to their low fares, but will not be an airline of choice for the Indian affluent. Till then, my taxes will continue to finance the adventures of Air India. 

AJ writes a travel and aviation focussed blog from India at You can follow him at @livefromalounge on Twitter.




5 years ago

Is this real life?
Too much real life


5 years ago







makarand patankar

5 years ago

air india has been looted by one and all,ministers,beurocrats,managers,unions,cockpit and cabin crew and also the sweepers on the ground.for many years i have seen cabin crew and ground staff stuffing their bags even with toilet rolls on landing .
i fly air india bom-ewr every three months and find it convenient ,aircraft 777-200 is good better than continental which also operates777-200,inflight service and food is much better than continental. lufthansa operates old 747-400 and with one stop.their inflight service is also so-so.
indian mentality is to whip ourselves,and dont acknowledge that crooks are with in us.

Shadi Katyal

5 years ago

It is well researched article and looking at the colour of the seats one wonder if anyone has ever thought that how such colours are not beneficial for passenger on long flights.
Let us leave that all aisde.; Air India can not ever become profitable even if they bring the latest fleets and employ some designer because the basic problem lies in service and staff attitude. Those Union employees are PSU/Govt employees and even if the flight goes empty, they get paid. One wonders if anyone in the Civil Aviation Ministry knows the meaning of productivity and customer service.
Once your flight ends you are on your own even though your connection flight has left because Air India failed to arrive on time.No one from the staff will even talk to you, forget any help.
Has GOI even thought that why Indian Business men fly foreign carriers. Have they ever noticed that how come 80% of foreign travel is on other flags.
Take Singapore Airline,owned just like Air India by Govt but run by private company and charges premiums on its tickets and it is fully booked..
One wonders how Mr. JRD TATA must feel seeing this Maharaja in rags.
New planes or not unless some courses of courtesy and attitude of service are given to employees, AI will never make any profit as one flight turns you off for ever.
It is time that being a service industry we must learn what service is. Rudeness is the first thing one come across from AI office when you book your passage to in flight and no help- at the end.
We must get rid of this white elephant and look around how many Govt airlines are now.It is indeed a pity that like everything else we have made this the Best airline to the bottom of the line.
The rudeness indiscipline and arrogance must be first handled.


5 years ago

who says AI has comparable fares? take for example, Delhi -Pune flight, INDIGO charges about 3700/-, AI webfare (cheapest one is about 6000/- plus leve aside the economy full fare which is about 21000/-) thats one way . On top of this, It is mandatory tfor government officials to fly AI on Temporary Duty, LTC etc.

Raj B

5 years ago

It is a bit unfair to say that Air India's 787 business class product disappoints on "finer ergonomic design aspects."

This product compares very well with the well-praised 777 business class offering on Qatar Airways, which is currently Skytrax's best airline in the world.

Also, the allegedly "cheapest" seats used in Air India's 787 business class are actually Contour Aerospace's highly-rated and popular Aura Classic seats. As you yourself discovered, these non-pod, fully-flat, spacious seats are "nice" and "comfortable" in multiple positions.

And, the supposedly "cheapest" inflight entertainment product used on Air India's 787 business class is, in reality, the cutting-edge Top Series PTV engineered by Thales.

As a blogger for Money Life, it would only be right of you to temper your criticism with these fact-based corrections.



In Reply to Raj B 5 years ago

@Raj, I am not debating the seat, I am debating the design of the shell. The screens are too far off, there are no work desk provisions and the colors are atrocious. Those are some of the things I did not like. Besides, my point seems to be have missed here. I am saying AI will not become the frequent flyers' choice till it thinks out of the box rather than its babu mentality. That new plane looks 20 year old from the inside!


In Reply to AJ 5 years ago

AJ, thank you for responding. I too would like to make some clarifications.

1. Skytrax's seat reviews consider not only the actual seat, but also the context of the seat (i.e., the shell, the IFE, the layout, the work features, the storage spaces, etc.). Qatar Airways' shell-seat design received no negative feedback about its screens, which are similar in size to Air India's 787 business class Thales TopSeries screens, and also at least as far away from the sitting passenger. Leading airlines with closer IFE screens in business class---including Singapore Airlines' extra-wide A380 seats, the Vantage seats on Swiss International's newer A330, and many herringbone-style layouts spun off over the years from Virgin Atlantic---have been criticized by passengers because, in spite of their initial media splash, such designs trade away space (i.e., one is forced to lie down sideways in a bent position because the area is extra wide but extra short; one is forced to always recline on one's back because the tiny alcove for one's feet will not allow one to lie down sideways; or, one is forced to face away from the window and away from one's mate and into an area sometimes too narrow for one's shoulder width) and they come with other inconveniences (i.e., turnover to bed).

2. For working passengers, Air India's 787 business class seat provides all the necessary connectivity, storage space, and desk area---the fold-out meal table can multitask---but without making one feel like one is still trapped in one's office cubicle.

3. The colors are standard Air India red and gold, with a patriotic burst of Indian-flag / Hindu-holywear orange, detailed with various intricate patterns---meant to be earthy and warm, like the Air India 777's. But beauty is in the eye of the beholder. And some have been saying for a while that the 70's are in.

4. Clearly, Air India is not after the highest-end premium passengers, since there is no first class offering on their 787, nor is there a first-class-ish 1-2-1 business class such as the 787 cabin revealed by Qatar Airways. But this is a wise commerical decision on Air India's part, based on its dismal experience in marketing its impressive 777 first class product, and based on aviation sector trends in light of the current economic cycle. Even without the five-star-or-higher segment, Air India's nonstop flights between India and North America have become a success in their own right, winning the loyalty of many frequent fliers. And Air India's 777 intra-Asian services have been noteworthy enough to merit a World Travel Award as Asia's leading economy class. Air India's 787 will certainly further these accomplishments.

Dirk Meiser

5 years ago

Nicely written article, but AI will not be the 2nd customer of the 787. JAL will become second.
And you are 100% spot on about that AI interior. This might attract "indian taste" but for westerners, especially the high yield J class travelers this looks like the 70s are back or that plane has been loaned from Austin Powers. I have no idea how an airline could chose such a color scheme....

All Observe

5 years ago

First, I must complement AJ for a very precise analysis.But, he has perhaps touched only the TIP of THE ICEBERG. First Management of AI-no words to describe it. Bureaucrats-wait for the banana to fall before they eat it.They will never stretch to pluck it,lest the whole tree falls,or the whole garden collapses, etc.They beleive in status-quo! So what if the banana rots & decays,they could not be bothered, because they are not at fault, but the tree or even the God who created the banana is at fault. ! A professional will visit the tree everyday, see which banana is ready for plucking, and then, WITHOUT WASTING TIME, with utmost dexterity pluck it, and not eat it but serve to a whole lot...!!This in short is the TRAGEDY of AI today-lack of a professional!!! No decision & above all fear of action.The Govt in the budget has given it 4K crores, Boeing will be giving millions of $'s, banks have agreed for restructuring to reduce interest burden, ECB route will be opened for cheaper fund access.With all this its finances can meet all its requirements- ' for some time ".But-AI is doing NOTHING on containing its daily crores & crores of losses it is incurring on Flt Operations- except pursuing a self defeating objective of lowering fares to fill up seats.A Sarkari strategy, which does'nt know the difference between passenger nbrs & revenues.Even @ 100% seat full, its flights are making huge losses.Australia route has been the biggest loss making route forever in AI's history-and once again it is going in that direction-withut learning from the Qantas experience.Instead of consolidating, and setting its house in order, with the fresh support from the govt, its inactive management guided by a coterie of self seeking outdated senior executives is desperately seeking self destruction by all these actions & more inaction. Why has not AI till date reduced its huge, unproductive, highly paid manpower, which all & everyone are yelling from the rooftops.Its non-core employees of 55 years & above can be just retrenched-as per the existing rules.Why is it not doing so, which should have been done last year.Because the coterie is getting affected,! and it will NOT ALLOW the management to do it, despite it being a writing on the wall. A 25 to 30 % reduction in employees & wage bill is a MUST. Why is structural reorganisation not being done, despite knowing that there are many duplication of jobs, redundant activities etc. Just a stroll in any AI's office will expose how BUSY, OVERWORKED & COMMITTED its employees are ! Playing scrabble on the pc, or gossiping in small groups in corridors, or in the Medical Clinic to see what all can be extracted etc. The Top level busy on the desk with some data analysis- data which half full is also right & half empty is also right !! This is the state of the company & its employees. In between you have those, pursuing personal agenda of a foreign duty trip by waiting for the bosses, & praising to be the biggest gift of mankind. SYCOPHANCY at its best. Should scarce public money be spent on these employees. It not only pricks the conscience, but makes it bleed, raising the question- is anyone bothered ?? Certainly not-no one is bothered !!!


5 years ago

Dear beauty lies in the eyes of the beholder. There are few losers like you who will find fault and bad with anything that has a government tag. You never went there with a open mind or probably went as a agent of private carriers. People like you set examples of biased MEDIA.


All Observe

In Reply to Ram 5 years ago

Thank you Ram- for just calling him an agent of private carrier- and not an agent of America or Pakistan or China. Yes we blame all except ourselves or even to see the reality hitting us. Dont worry your salaries are intact & will continue to come- work or No Work...but for heavens sake spare us the tax paying citizens of this country-


5 years ago

Absolutely true. Planning is the most important thing, Goals top down and plans bottom up. At AI that is not on. Success of airlines are today pivotal on Pricing and Revenue management and not Yield Management. At AI they practice YM and not RM. Empowering the bottom layers of management and making them accountable is unheard of. Also they have a policy where oldies are sent overseas and not young. The result is they just spend time till retirement enjoying and not doing any work while the young and energetic are left to rust at home. You got to send the young overseas get them to acquire experience and then later invest at head office.
Getting new 787 will not be a panacea for current ills in marketing. You need new and dynamic thinking ones at the top in Marketing.

Economy & Nation Exclusive
Will Zenith Infotech be wound up due to FCCB defaults?

In a case similar to Wockhardt, creditors of Zenith Infotech filed a winding up petition in the Bombay High Court due to defaults in payment of about Rs450 crore

They represent the Gen Next at India Inc and can be found talking about corporate governance and transparency at various forums. Unfortunately, one of them has been found to doing exactly opposite and has not been paying dues to its creditors so much so that this may shut down the company.

Creditors, including hedge funds, are waiting for a Bombay High Court judgement to wind up Zenith Infotech, a business continuity and cloud computing services provider from the Raj Saraf group. The case is scheduled for hearing on Wednesday (21 March 2012), where Zenith Infotech is expected to file its reply.

In 2006, Zenith Infotech, run by Akash Saraf as managing director and chief executive, issued foreign currency convertible bonds (FCCBs) worth $33 million at a conversion price of Rs310 per share due in September 2011. Next year, the company again issued FCCBs worth $50 million at a conversion price of Rs522 per share and due to mature in August 2012. The first tranche of $33 million came up for repayment as Zenith's share price at that time was below the conversion price on the maturity date.

However, in a regulatory filing, the company admitted that it has defaulted on its $33 million FCCB and was in negotiations with the bondholders to extend time for repayment. Since there was a default in payment of the first tranche, it triggered a cross default provision under which the second tranche also was considered defaulted. This made the total defaults of around $83 million.

According to the creditors, Zenith Infotech owes them more than $90 million or about Rs450 crore. "We tried contacting both, Akash and Raj Saraf but could not get any satisfactory answers from them. In fact, we found out that at the time of the maturity of first tranche, the company had shown Rs150 crore as cash in its balance sheet," said one representative of the creditors, who did not want to be identified.

He said, “Despite having the cash, Zenith Infotech has not paid our dues at that time. Later on 26 September 2011, it decided to sell one of its two divisions, called managed services division (MSD) through a newly incorporated vehicle Zenith RMM LLC in Delaware to US-based private equity fund Summit Partners via an asset purchase agreement."

Surprisingly, on 5 January 2011 Zenith Infotech informed the BSE that it would call an extra ordinary general meeting (EGM) on 29 January 2011. The notice dated 27 December 2011, said it would borrow Rs1,500 crore from the domestic markets and or through external commercial borrowings (ECB). The notice also said, "To sell and / or lease the business and/or divisions including the subsidiaries (wholly and part) of the company and for that purpose to issue debt securities/ bonds etc in the domestic or international markets as permitted by law so as to redeem /re-pay the outstanding foreign currency convertible bonds which would come for re-payment/redemption in August 2011 and August 2012."

Subsequently, in September 2011, after the default, the company sold its division for an undisclosed sum. "When we contacted Akash and asked about the deal value, he told us a very small amount contrary to the valuation and earnings of the MSD business. We then approached the high court, which directed both Zenith and Summit Partners to disclose details," the creditors said.

Following the court orders, it was discovered that Zenith received $54 million or about Rs250 crore in cash for selling 85% of its MSD business and would also retain 15% ownership in Zenith RMM with Summit Partners holding the rest.

According to the representative of the creditors, they were shocked when they come to know that Zenith Infotech, despite owing the business, received only half of the payment. He said, "Shockingly, it was revealed that Zenith UAE received about $27 million and Zenith Infotech received $21 million with a provision for $6 million to be placed in an escrow account and be paid over two years, even though the business was held by Zenith Infotech. The company claimed that Zenith UAE held some very critical software component but when asked by the court to show the valuation on what basis Zenith UAE received 50% of the proceeds, both Zenith and Summit Partners failed to provide an answer."

Zenith UAE, which received $27 million or about Rs133 crore from the deal is a very small entity. For the year to end-March 2011, its sales were just $100,000 or around Rs50 lakh. "It is believed that Zenith Infotech took half the payment in UAE to save itself from paying taxes in India and for not repaying the FCCB bondholders. Furthermore, Zenith UAE has been allotted 14% shares in Zenith RMM and therefore all economic benefits in relation to those shares will vest with Zenith Infotech UAE depriving creditors the benefits accruing on the shares," the representative said.

In an affidavit filed before the court, Zenith also revealed that it transferred about $15 million from the proceeds to Vu Technologies, a company run by Devita Saraf, the daughter of Raj Saraf and sister of Akash Saraf. However, till date Zenith failed to explain what happened to the Rs150 crore it showed on its balance sheet and why it did not cleared its dues or repaid money to FCCB holders.

"Interestingly in spite of the Rs150 crore ($ 30 million) plus cash reserves and the new money received by the sale of the MSD business amounting to Rs250 crore (or $51 million), Zenith has not cleared any of its dues to its FCCB holders, especially given that the FCCB holders are the only creditors to this company," he added.

The FCCB holders, anticipating that Zenith might siphon off its other profit making division, the cloud computing business, filed a petition in the high court. The court in an order dated 14th February, restrained Zenith, from selling or transferring its cloud computing business to anyone. According to Ernst & Young (E&Y), the court appointed valuer, the cloud computing business is worth over Rs598 crore.

"The company had shown money in its balance sheets only to back-track in the court saying that it was an error. Zenith's both division are earning good revenues and yet we found that the promoters are unwilling to pay our dues that too when we are the only creditors of the company. This is not a question of corporate governance but a malafide intention of not paying dues," said the representative.

He said due to this kind of behaviour from a well-known and reputed corporate like Raj Saraf, several creditors from overseas are looking to countries other than India. He said, several of bondholders are busy scouting places like Indonesia for lending money rather than India.
Officials from Zenith Infotech, including Raj Saraf and Akash Saraf, were not immediately available for comments. An email sent to the company's press relations in-charge bounced.  

In a similar case last year, the Bombay High Court asked Wockhardt to clear its foreign currency convertible bonds (FCCBs) dues by 31 August 2012. The court asked Wockhardt to pay Rs3.15 billion to the FCCB bondholders, including the US hedge fund QVT Financial LP and Sun Pharma Global Inc. Wockhardt owed Rs4.21 billion, including interest and redemption premium to FCCB holders.


Public Interest Exclusive
MyVideoTalk using MLM route to pitch customised e-mail messaging products

 The US-based company promises incomes of up to $5,000 per day!

Free e-mail services, free video chatting, free broadcasting are few of the many things made easily available to all of us on the Internet. However, a multi level marketing (MLM) company is thriving on selling such services, which otherwise are mostly available free of cost.

MyVideoTalk (MVT) is a US-based MLM company selling products like video streaming broadcasts and meetings, customized email video messages and on-demand video web channels. It also claims to give rewarding compensation, incentives and other income, on buying its products and recruiting new members.

MVT has two packages each consisting of MyVideo Studio, which introduces the tools to get you started in your business; MyVideo Designer—to create an email and custom design it with full colour images, logos and banners; MyVideo Channel—a fully customizable video website with complete website hosting and support; MyVideo Broadcaster for live broadcasting to host events, trainings, and video conferences and MyVideo WebSite, where one can create personalized website for business and product marketing, among others. Its basic studio package costs Rs15,000 while the business builder studio package costs Rs27,000.

The MLM company also has a host of other income benefits for its members. It pays $50 as fast start retail bonus on the volume of sales by its members on joining. 

In the first month of the sale, 20% commission is paid on the products purchased through the company’s retail shopping portal. The company promises a weekly team commission where a member/representatives can earn up to $150 every time they create 720 WSV (weekly sales value)/360 WSV earning up to $5,000 per day and a maximum of $35,000 per week. Then there are other typical MLM compensation plans such as monthly binary matrix, executive leadership matrix bonus and ultra bonus program.

Experts point out that the company follows a typical MLM plan and is bound to collapse under its own weight in the long run. It also has a questionable business plan. For instance, the company does not have its independent channel to send the customised video messages and has to rely on official channels of Google, Yahoo and Rediff. Interestingly, according to its website, the amount to paid to buy its product is given in Indian rupees, however, all the compensation income is given in dollar terms. 

Moneylife has learnt that the MVT is extensively promoting itself at Nagpur in Maharashtra. Its products were also displayed at CompEx (computer exhibition) organised by the Vidarbha Computer Manufacturers and Dealers Association in January 2012. The company’s website does not have registration address or legal certificates.





5 years ago

Another company with such modus operandi is talk fusion.
They also are promoting such technology.


5 years ago


These criminals seem to be moved out from MUMBAI to other districts of Maharashtra.



In Reply to AntiPonzi 5 years ago

Moneylife once exposed a multi level marketing company. But they are still thriving in Navi Mumabi?

Who will check these people?

"Required marketing people for multi products marketing company at Vashi - Mumbai"


In Reply to AntiPonzi 5 years ago

Now, money chains can flourish !!


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