Air India – God save our Maharaja

Started in 1932 as Tata Airlines by J.R.D Tata, Air India was formed in 1953 when air transport industry was nationalised. Since then the Maharaja has been a household logo and a strong brand in itself. However since last decade a complete mismanagement of the organisation by its owner; government of India has led it begging for a ‘bailout’.

Some really foolish decision in the national carrier; Air India and Indian Airlines that would make even a layman raise eyebrow:

• There were 2 national carrier; Air India for international and Indian Airlines for domestic for more than 50 years, but we learnt about word called ‘synergies’ in 70s or 80s. Was there a need for distinction between domestic and international operators? Better late than never; finally there were some talks of merging both the national carriers which began sometime in 2000 which finally happened in 2007.

• In late 2005 a plan to re-brand Indian Airlines as India was rolled out. That is a big joke when one knows that we are going to merge both the national carriers and the identity of Indian Airlines is anyways going to be lost, why was there a need to re-brand. Further I travelled once in a rebranded Indian and the experience was no different from Indian Airlines. It was just a cosmetic change; something similar to what many public sector banks did a year ago (refer my post on re-branding public sector banks). I am sure that there was huge amount of money that was wasted in this process.

• The worth of new fleets ordered was more than the revenue of the entity. Now this is something that can never go well with any person. Though there has been big acquisition by large conglomerates in recent past; but they were exception than a rule. I am not sure if there was even a rough plan on how would the payment for these fleets by arranged?

These are just few examples that make us raise eyebrows on the governance structure of operations of national carriers which is now National Aviation Company of India Limited (NACIL); the parent company of Air India and Indian. There could be many more but these are enough to raise questions on the people managing the show. The minister who has been responsible has been continued for more than last half decade and now he is being asked to prepare a restructuring plan. Can someone tell me; what is the incentive that he gets by turning around this company? In fact the incentive is reverse; the poorer it performs the higher the bailout.

I am sure that we will see more losses than posted by any company historically in India unless we make it run like a private company and bring in some professional managers to turn it around.

The company has already posted Rs. 8,000 crores losses and there is some hue and cry in the parliament. However people in the parliament seem to be busier in protesting against some reality shows instead of focusing on thousands of crores of tax payer money going in drain.

Dear GOI, please bring in some person from industry like you did for Unique Identity Project; else only god can save our Maharaja.