How Air India was destroyed

The price of putting the once iconic brand—Air India—is now an estimated Rs30,000 crore. The cost of looting that much tax payer's money puts the aircraft once again back into spotlight

India is woefully short of whistleblowers, especially on the vast public sector, beset by corruption and waste. Honest officials, who stand up to venal politicians and pliable IAS officers, are bound by official codes and do not speak up even when they are shunted from one post to another. Such upright persons are usually at loggerheads with powerful trade unions too which are invariably also a part of the problems leading to decay.

The cost of all this is borne by the citizens when the exchequer periodically pays for a bailout or re-capitalises banks. When that happens, there is some media discussion, mainly restricted to the business press, but the ordinary person remains largely ignorant of the vicious confluence of issues—red tape, corruption and lack of accountability—that leads to losses and bailouts.

Jitender Bhargava, who has been the face of Air India for over two decades, provides an inside account of how the airline was killed, in his book Descent of Air India. It is a story that needed to be told because the fall of Air India mirrors our gradual decline from a newly independent nation brimming with hope and enthusiasm to the economic mess we are in today. The legendary JRD Tata (JRD) and his marketing whiz called Bobby Kooka made Air India one of the best airlines in the world (its ‘hawai sundaris’ included Maureen Wadia and Parmeshwar Godrej, among others) but the rot that set in after its unceremonious nationalisation by prime minister Jawaharlal Nehru took a few decades to show up as big losses.

Over the decades, the government asked JRD to continue as chairman and, later, as a director, but ignored his anguished letters that pinpointed what was going wrong. The importance of Mr Bhargava’s story is not merely in the fact that it highlights how Air India has sunk to the point of irrelevance and is likely to stick us with a whopping bill of Rs30,000 crore for keeping it alive and restructuring it. He does a bigger service by writing about how every tough chairman who cut losses or generated profits was viciously punished by the political establishment and any director who raised objections was unceremoniously removed. Stopping the personal loot of the national carrier was seen as a crime.

V Subramanian, additional secretary and advisor in the ministry of civil aviation, raised objections to the disastrous fleet acquisition under Praful Patel in 2004. He was removed at ‘lightening speed’ and transferred to the ministry of rural development the day he asked for some data at a board meeting.

Sunil Arora, an efficient and no-nonsense Rajasthan cadre IAS officer, who turned around Indian Airlines and later made dramatic improvements in Air India’s profitability as its managing director, was hounded and victimised. He was shunted to an inconsequential state posting when he dared to question the fleet acquisition and informed the Cabinet secretary in a formal letter about what was going on. A CBI inquiry was instituted against him.

One of the worst sufferers was Michael P Mascarenhas who had supported disinvestment and opposed doling out of bilateral rights to foreign airlines in 2000-01. He had also ensured that Air India made operational profits. For his trouble, a cabal of politicians suspended him on trumped-up charges. All charges were later dropped and he was reinstated a couple of days before his retirement, but the after effects of fake investigations launched at that time continue even today.

Mr Bhargava also explains how the airline reached a point of no return under chairman V Thulasidas who acted as ‘His Master’s Voice’ to minister Praful Patel who seemed bent on decimating the airline. The story is important for all concerned citizens, at a time when opposition to privatisation is based on false romanticism about it being a national carrier. Politicians will continue to plunder the airline as long as it remains under State (minister’s) control. And government officials will rip it off through upgrades and free tickets for friends and family. At a time when there are questions about the ownership of Jet Airways and Kingfisher Airlines has stuck banks with bad loans to the tune of Rs7,000 crore, India urgently needs a dispassionate look at Air India.

indranil sinha
1 decade ago
Mr Sainani seems to have an issue against Jitenrda Bhargava...maybe a personal agenda ..or os he regreting he isnt a part of the loot ?
1 decade ago
If one were to name one person responsible for the down fall of Air India ,it will in my opinion be Praful Patel
uttamkumar dubey
1 decade ago
Hi Author,

We r helpless n hopeless ppl, i think kejriwal (kind of person) and u will be a good mix for the society.

If we cant lead we should be follow genuinely.

Rest nothing will come out of comments by the ppl here.u see whole system and governance is negligent, only revolutionary approach can do sth.


1 decade ago
And, you have the likes of Raghuram Rajan and Chidamabaram pretending to have the economy under control! They are sorely testing the reputation of Manmohan Singh as an "economist"!
1 decade ago
Thank god, Mr Mahatma Gandhi is not alive today, our netas would have made some sex scandal against him,which would have remained in CBI never ending enquiry until he shoots him self.
shadi katyal
Replied to geniusman comment 1 decade ago
Why is Gandhi being dragged into this discussion. He was no Mahatma. Read about his love affaire with his males friend in S.Africa. Less said the better.
Always stick to the point of Air India
Replied to geniusman comment 1 decade ago
Right, because today Godses are no more exisiting.
P M Ravindran
1 decade ago
I am concerned about How India has been destroyed and here is Sucheta Dalal probing how Air India was destroyed! Well, the longest journey begins with the first step, ain't it?
shadi katyal
Replied to P M Ravindran comment 1 decade ago
Evidently you hjave missed the point. Air India is a PSU and it has sucked more money than any of other PSU with no returns and yet you object why?
Let us hear your concern about India and have a long discussion on it.
The very fact that people write books after having achieved the rewards of service and perks and call themselves whistle blower is an insult to true whistleblower.
Ms. Dalal has as much right to express her onion as you have.
Replied to P M Ravindran comment 1 decade ago
I tend to agree Ravindran.
Mark the mockery of our country. Forget about the politician who destroy the sanity of 'Legal Rule'
to do anything for a few votes, even drying out crocodile tears in misplaced show of 'Humanitarian sympathy'for a few hundred people .Mumbai is saddled with 'Illegal and lopsided' jungle construction ,pollution and all round decay due to corrupt officials, politicians ,greedy buildrs and developers and the 'ever changing' judicial pronouncements. The State who is supposed to uphold the 'Rule of law' and Court orders shows 'helplessness' if a few people refuse to abide by their own 'Affidavits' for selfish reasons. Government will come heavily against the 'Peaceful/Gandhian type' demonstrations like Anna Hazare's
"Lokpal" demand; but to uphold the implementation of SC order,they will sit helpless and allow to pass the time. If Government could not stop the 'Supposed inhuman act' by promulgating an ordinance for regularising 'Illegal Constructions, because it will have widespread ramifications on the entire Mumbai's orderly planned development and genial ecological balance, "Adarsh' or NO ADARSH, the Apex court itself will change its order anytime or umpteen times. Where is an end ?
And if the State Government or NETAS were indeed concerned with 'Rule of Law without Tears' the State could have rehabilitated the displaced people by alternate accommodation 'free of Cost'.
Is it a 'Construction of the Country or Destruction'?
Entire Aviation sector is being systematically destroyed. Kingfisher and Spice airlines are private and not public,who destroyed them ? Corruption looting is prevailing in entire country,not depneidng on who holds the ownership?
indranil sinha
1 decade ago
Well done Mr Bhargava ! he does have MORE guts than most of us lets appreciate that . It needs courage to name powerful people. So Mr Katyal and Mr Dubey before you COMMENT , take a good look at yourself in the mirror .
shadi katyal
Replied to indranil sinha comment 1 decade ago
Why this personal attack on mer and Mr.Dubey???
It take guts when you are still holding your position and be a true whistle blower not after you have got your perks and retirement funds and now trying to double dip with such book. My serious advise to you that you donot know any of us and such language does not make you better

1 decade ago
Air India should be sold . The GOI has reduced it to a pittance Why give 30000 crores. Everybody knows that it is the politicians who benefit from AIR INDIA being in Goverment hands.
Replied to rajivahuja comment 1 decade ago
Nobody will give a penny for Air India. 30,000Cr is just a figure, the actual cost of acquisition is much more. This is 300Rs for each one of us and perhaps 5,000Rs per taxpayer.
1 decade ago
Politicians and bureaucrats who killed the Maharaja of Air India
1 decade ago
The UPA had put Praful Patel on the Janlokpal bill advisory commitee, for heaven's sake!
Ms Dalal, you need to highlight that Praful Patel was an erstwhile director of Jet Airways, and he merged IAC and Air India so that under existing bilateral agreements with Gulf States, Jet could operate to there. He then reduced capacity by replacing the two hundred thirty seater Airbus with a hundred seater Boeing (air India express) and allowing Jet to pick up the balance pax. He then ordered the shut down the gulf sectors one by one for Air India. A very Very Smoothly carried out operation indeed.
He then took bribes from Emirates airlines and gave a 5 fold access to them to India- one thousand seats daily!They operate ten Boeings daily to Delhi and Mumbai, pick up all the west bound load and offer a twenty percent discount because fuel in the UAE is twenty percent cheaper.You guys have very little idea how the interests of the country have been hijacked by the UAE by the simple method of bribing the ministers. Ajit Singh is now following suit with the Etihad deal. No less than the CMD of Air India, Rohit Nandan, has opposed the deal on the above grounds. But the UPA continues to sell the nation short in its desperate bid to stay in power by making compromises with the very very venal politicians of the NCP.
Replied to sanjay comment 1 decade ago
You are absolutely correct in your observations.
MG Warrier
1 decade ago
Mismanagement of Air India is a ‘well-researched’ subject and only hush-hush is about who are behind the common agenda to kill public sector enterprises. Leaving that part of investigation to those better equipped, I would like to flag some HR-related measures which can save public sector organisations across all segments of industry/services.
To comment on the non-performing administration in the public sector and government-owned bodies, these days, no deep research is needed. PSUs in India including Public Sector Banks have become whipping boys of government, regulators and the new generation advocates of privatization.
Government (some officials and ministers) think they are the owners of PSUs and PSBs(in a way, they are!) and use them for carrying out their agenda and for milking them dry to quench their thirst. These institutions (and government) get the private sector-rejects or retired/retiring government officials at their top who carry out the wishes of their masters in government. It is not that these organizations cannot compete with their private sector counterparts. They will outperform them, if a level playing field in terms of skill, technology, opportunities and autonomy in management (including freedom in managing HR) is assured.
But, to make this possible, the selection procedure, at least from middle-management level and compensation package will need an overhaul. Career progression with appropriate provision for inter-mobility within the organization and at higher levels within the sector will have to be planned with the ideal age profiles at various levels and the need for a minimum tenure of 5 years for those who reach that level.
Hemlata Mohan
1 decade ago
This is the story in almost all Public sector enterprises-in any other country the persons responsible for this mess would be consigned to oblivion-and amounts howsoever small would be recovered from their personal assets( this happened even in an African country- Sani Abacha).In our country, we would "reward" him with plum posts so that he can continue his activities merrily ever after....
shadi katyal
1 decade ago
One must ask that why did Mr. Bhargava did not blow the whistle and now trying to sell the book. Could he tell us his reasons of being quite. Was this fear being sent to nether land.
Everyone know that how a Maharaja line became a beggar's one and has been openly looted
like any other PSU. Even Indian businessmen are unwilling to fly because it is not only lack of any discipline but very rude behavior of even ground staff.
Why would TATA takes such a loosing company.
The unions are more militant and airline is overloaded with unnecessary baggage of more workers than any other line.
This is how PSU work where an IAS officer follows the rules and withj no knowledge of how business is run.
It is also heaven for MP, Ministers and VIP aboard, one can see the sycophancy all around.
re any auditing is done of the company ???
Sucheta Dalal
Replied to shadi katyal comment 1 decade ago
Many whistles were blown internally. Who was hearing them?
shadi katyal
Replied to Sucheta Dalal comment 1 decade ago
Why will anyone pay to his whistler blowing when he is out. can he show any such whistle blowing while holding the job?
This is double dipping by making money on selling book and trying to prove what a great efforts he made to keep his job and earn his perks.
Sorry Sucheta ji , it has become a
way of life for us.The whistle blowing needs guts and when one is still employed and not after
Replied to shadi katyal comment 1 decade ago
This is what I have been saying right from the beginning.
"The whistle blowing needs guts and when one is still employed and not after"
shadi katyal
Replied to KARTAR SAINANI comment 1 decade ago
We have a culture where we back people like Bhargava who is new brave to write to make fool of the public. What is called double dipping. One sacrifices if has any principles .Needs guts and courage
uttamkumar dubey
1 decade ago
This article or magazine is another form of arvind kejriwal.

Its just following hit-n-run as kejriwal and it says our nation lacks whistle-blowers.
Dont you think kejriwal is right in his approach,n khemka need real honest support? And no man supported him openly except Kejriwal and AAP.
Durga nagpal was also put on silence in this democratic nation.

When kejriwal makes allegation ppl say (so called intellectuals) he did not take the case to completion.Is he supposed to convict the ppl also?

Madam this nation really lacks powerful ppl with will to stand by honesty-integrity-n-accountability.

The reality is there is complete lack of justice, and ppl dont know whom to approach for any resolution in this times of jungleraj.

Do you think your magazine and article able to convert dishonest and corrupt bureaucrats to execute things honestly and fearlessly.

Isnt MEDIA is just like another MNREGA scheme for cowards and crooks, and they extort money for false publicity.Media should be made accountable to ppl rather politicians.
1 decade ago
One viable solution appears to divest AirIndia in PPP mode by transferring the reigning controls in the hands of the most capable person shri Ratan Tata. TATA gROUP HAS ALREADY EXPRESSSED ITS WILLINGNESS TO TAKE THIS CHALLENGE as it is the SEED sown by the late Doyen and pioneer of Indian Aviation J R D Tata.
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