Why did it happen exactly?
And how did Air India become an exalted airline at one point in time?
Come, in today's blog, let's get to know the interesting story of Air India.
"Of India's several airlines, the largest, Air India, is Tata controlled. Operating over 6,000 miles of routes, it has built up an excellent reputation for efficient operations.
Established in 1932, the airline connects the large cities of India, and now maintains international service reaching London." "Jet travel has brought East and West close together. And now the passenger crossing the Atlantic, has the beauty of the Orient at his elbow. Giving him the comfort that air travel is expected...."
This isn't the story of only Air India's history. Rather the history of the country's civil aviation. 1903 was the year, friends when the Wright brothers flew the first aeroplane of the world. About 8 years later, in 1911, the first aeroplane was flown in India. Its pilot was a Frenchman, Henry Pequet. The flight from Allahabad to Naini lasted 15 minutes and carried thousands of letters. You heard it right, the first flight in India was actually carrying mail.
It was carrying letters for the Maha Kumbh fair. About 20 years later, on 15th October 1932, JRD Tata flew the first Air India plane from Karachi to Mumbai. Then it wasn't called Air India. Its name was Tata Airlines at the time.
His flight was very historic. But it wasn't easy for him to achieve this. He had to go through many struggles. 3 years before this, JRD Tata became the first Indian to acquire a flying licence. Flying planes was his passion.
It was his dream. In fact, he had even participated in a contest in which he flew an aeroplane from India to England.
But he had another dream. To bring civil aviation to India.
Civil aviation meant giving the commoners the opportunity to fly in an aeroplane. But it wasn't easy to do this.
To do this, cooperation from the government was needed.
But during the 1930s, India was under British Raj.
And the British government was obviously not very helpful.
As you can imagine, they saw no profits in paying JRD Tata or giving him subsidies to enable him to fly his domestic planes in the country.
At the time, Sir Dorabji Tata was a prominent person
and he agreed to invest in JRD Tata's dreams.
Tata tried a lot to make the British government agreeable.
The government rejected all of his offers. And then one day he went to the British government and told them that they didn't need their money and that they would donate their services they only wanted some aircraft and permission to fly those aircraft.
And finally, the British government agreed to it and thus the Tata Airlines was born in India, friends. After this, the first Tata Airlines flight was flown from Karachi to Bombay.
Carrying letter weighing 25 kg. And obviously, JRD Tata piloted this flight. In the same year, Tata Airlines started domestic flight operations for the passengers. Then, one return ticket from Bombay to Madras cost ₹256.
You can imagine how much it would've been in today's money. 1946 was the year when Tata Airlines was renamed Air India. In the same year, Air India became a public limited company.
A company, in which even you and I can purchase shares.
In 1948, when India was already independent, the new Indian government bought 49% shares of Air India.
At the same time, JRD Tata started Air India International.
For international flights. The next major change was in 1953. It was a disheartening event for JRD Tata. The Indian government decided that the entire airline sector of India would be nationalised. Meaning all the Indian airline companies would become government-owned. The government then merged 8 domestic airlines into 1, and Indian Airlines was thus created. The domestic wing of Air India was one of these 8 companies.
Additionally, the government had also nationalised Air India International. And it became a Public Sector Unit. Owned by the government. Nationalising major sectors in the 1950s was a major policy of the Nehru Government.
The objective of the government was to support these industries so that there could be progress in the country. But it also meant that the private businessmen and investors, lost their opportunities.
As you can imagine, the industrialists and the large businessmen in the country weren't happy with this decision. Including JRD Tata. This part of the story is very interesting, because JRD Tata and Pandit Jawaharlal Nehru were good friends.
Nehru always encouraged scientific progress in the country and was very happy to see how Air India had changed civil aviation in India. And JRD Tata also admired Pandit Jawaharlal Nehru a lot, but when the government passed The Air Corporations Act, 1953 through which Air India was nationalised, JRD Tata saw it as a betrayal.
He clearly disagreed with Pandit Nehru's this decision. JRD Tata's opinion on nationalisation was always against it. "Nationalisation of industries, the way it is done, those considerations made me oppose the nationalisation of industries. Though, quite accepting the fact that some industries, some activities must be done by the state."
Whenever JRD Tata tried to talk about it with his friend Nehru, Nehru would look the other way. "And then I would try to bring the conversation to economics, nationalisation, bureaucracy, he was only not interested but he wasn't willing even to talk. The moment I began something, he'd turn around and look out of the window. And I got the message." Later Pandit Nehru wrote a letter explaining why the decision was taken. He said that the Congress party wanted to do it for over 20 years but couldn't do it.
The government wasn't actually against Air India. But Nehru did feel that it would be better for the country to nationalise it.
Even though JRD Tata was against it, he couldn't do anything against the government's decision.
Air India was finally nationalised. But one thing that needs mentioning, JRD Tata still remained a part of Air India.
He was made the Chairman of Air India International and he became the Director of Indian Airlines.Caviar on ice.
The finest steaks, champagne, a menu prepared by the chefs of the Taj Hotel.Grand lounges, designed by the artists of Shantiniketan.
Had you travelled in Air India in the 1950s and 1960s,
then descriptions such as these would have been used for your journey.
Air India was known as a 'Palace in the Sky.'
As I told you, luxury travel, world-class food, such that international airlines like Singapore Airlines took inspiration from Air India. The credit for these goes largely to JRD Tata. It's said that he would fly in Air India's flights
to ensure that the services ran efficiently. If he saw any imperfections like a dirty corner, he went and cleaned it himself. If we were to talk about JRD Tata, he was a phenomenal personality.
Air India's fame is perhaps incomplete without its mascot.
This Maharaja.
You would've seen this photo everywhere in Air India.
On postcards, stationery, and even in advertisements.
Did you know that Maharaja was conceptualised in 1946?
By Bobby Kooka.
The Commercial Director of the airline then. Over the years, Maharaja is depicted in other cultures and countries. Showing that Air India carries its passengers all over the world.
During the 1960s and 1970s, Air India wasn't merely an airline, it was a representation of India.
How our country was viewed on the international stage.
Air India was associated with hospitality, Indian culture, food and even art. Talking about art, did you know about Air India's art collection of more than 8,000 works?
Paintings, textiles, sculptures, glass paintings, they have collected this collection over the last 60 years.
And this was a calculated move. The thing is that there weren't many international airlines at the time, so the airlines competing against Air India, were giving it a stiff competition.
Air India had to do something to stand out as an airline.
To be different from the others. To do this, the advertisement department of Air India decided to reflect Air India's identity by displaying Indian art and artefacts in their aeroplanes and lounges.
The most famous artists around the world, of the time, were commissioned to create artwork for Air India.
Like in 1967, Air India commissioned the world-renowned artist Salvador Dali.
To create a special ashtray for Air India's customers. And he made an ashtray that looked like this from porcelain.
But he didn't ask for its payment in money, it's said that Dali asked for a baby elephant in return.
So Air India flew an elephant calf from Bangalore to Geneva. These are the stories, friends, that show
how special Air India used to be in its time.
The Indian fliers were often very loyal to Air India. And that makes it even more shocking how the situation could worsen so much. Why did Air India fail in the last 20-30 years? "Air India's recent crisis. Where are those massive, massive losses actually coming from?" "With losses over ₹70 billion India's national carrier is in deep financial trouble." In 2007, Air India and Indian Airlines bore losses worth ₹5.41 billion and ₹2.31 billion respectively.
But since both airlines were government-owned Public Sector Units, this loss of the airlines had to be borne by the government.
The government then decided to merge both airlines into one. Hoping that these losses would cease.
But instead, this combined company, National Aviation Co. of India Ltd, incurred losses as well.
Why was it so?
Why were the airlines at a loss?
Some of the reasons are quite straightforward and fact-based. For example, when this merger took place, before this merger, the government had acquired a large fleet of airlines of various specifications and sizes. And it cost about ₹440 billion. Basically, the government had purchased new aeroplanes.
Additionally, the expenses on the salaries also increased.
There were even strikes by the pilots demanding fair salaries. Because of this, the company had to incur revenue loss, because the planes couldn't fly due to the pilots being on strike. And the operations of the company were affected. This cost the government a lot. In the upcoming years, some more bad decisions were made
by the government regarding Air India. Like, the revenue from the passengers was decreasing year-on-year because the passengers had more options to fly by way of the new international airlines. So Air India decided to open up more flights on new international routes expecting more passengers to fly Air India. But the new international routes turned out to be loss-making. Apart from this, it is said that Air India had hired excessive crew members.
There was no need to hire the number of people they had hired. So the salaries were being paid unnecessarily leading to the wastage of even more money.
Jitender Bhargava, the former Executive Director of the company, says that management problems in Air India had begun in the 1970s. The top management was changed in these years.He said that before the change in management, the cabin crew members were rigorously trained. In-flight service used to be the top priority of Air India.
And that's why everyone preferred Air India. But after this change, the cabin crew weren't trained properly. And the process of recruitment wasn't as strict. The company started hiring people without proper screening. Leading to an increase in expenses and a fall in the standards. When the standards of in-flight services started falling, the passengers, obviously, started looking at other airlines. In the next few decades, there were even disagreements between the government and Air India's management.
But since Air India was a Public Sector Unit, a government company, Air India's management had to abide by the government's direction at the end.
For example, in 2007, the government spent millions of Air India's money on advertising.
Even though the management believed that money shouldn't be wasted on it at that time, and incur losses due to it. Here, there's a very strong argument favouring privatisation.
Since Air India was a government company, meaning the ultimate authority of decision-making was with some politicians, and some government officers.
And they did not have much knowledge of the airlines' industry.
Which airplanes to buy?
How many should they buy? On which routes should the airline be flown? Incompetent people were at the top.
They couldn't make the right decisions because they lacked knowledge and they did not have much experience.
And neither did they have the motivation to make the right decisions. Because it is often said about government jobs
that once one gets the job, they are set for life. Regardless of how one works. As compared to a private job, where one has to work properly to impress the boss to move ahead in career, and the profit motivation is always present in a private job. So how could Air India be successful?
Although another point to note here is that the nationalisation of Air India had already taken place in the early 1950s. And till the 1970s, the airline was flying quite well. It was a world-famous airline. Considered one of the best airlines in the world.
Even though it was a nationalised airline. Perhaps because the top management was working well. And was motivated. JRD Tata was handling it himself.
Who had founded the airline. So he had the motivation to keep the airline in top shape. Perhaps that's why Air India story is less about the success and failures of privatisation versus nationalisation and more about improper management and bad decision-making.
Which can be seen in a private company as well as a nationalised company.
In 2017, the government decided to privatise Air India.By 31st March 2020, Air India had accumulated losses of over ₹700 billion in total. This burden kept on increasing every year. To the extent that the government found it increasingly difficult to sell this airline. But finally on 8th October 2021, the government successfully sold off this airline to Tata. For ₹180 billion. This decision is seen as a big celebration. The airlines have returned to their original owners again.The Tatas. Only time can tell if Air India could once again become a successful airline after this decision. Whether it could recreate its identity in the world or not.But I would definitely like to tell you one thing at the end,that if we look at the best airlines in the world today,
Singapore Airlines, Emirates, Etihad Airlines, Japan Airlines, Lufthansa, in this long list, you will find nationalised airlines those airlines controlled by the governments, like Singapore Airlines with the Singaporean government holding the majority stake, or Emirates and Etihad, that are 100% government-controlled airlines, On the other hand, you will find private airlines as well.
Like Lufthansa and Japan Air. In my opinion, it doesn't make a difference if an airline is owned by the government or privately. In the end, it is about good decision-making and good management.
What do you think?
Comment below and let me know.
And let's meet in the next Blog.
Thank you very much.
nimce blogm vRo
ReplyDeletetq
ReplyDelete