Air India: An epitaph or a renascence?

Last year in the month of July, yours truly had planned a trip to India from Canada, on our national carrier- Air India. I had planned the trip well in advance and I was overjoyed at obtaining a good price for my ticket during this busy season. Barely days after I had booked the flight, news came out that a certain section of the Air India staff being unhappy over a petty incident involving the flying rights to the new Boeing Dreamliners, decided to strike work. Within days, this workers’ strike got worse and out of control, forcing Air India to cancel many international routes including the ones to and from Canada. Yours truly was taken aback with this abrupt decision from Air India, and was forced to cancel his ticket, and obtain a proper refund after weeks of reasoning with a highly inefficient Air India customer service. The strike went on for months and Air India limped back into operation just when the most revenue generating season, the period between June-October, ended.

Since the time I can remember, growing up in the Middle East, Air India had been the airline of choice to travel to and back from my motherland. The Middle East, home to millions of Indian workers, known as expatriates was a mere 4 hrs in flying hours and was close to most of the destinations in India. Incidentally the flying time was similar to travel between any point in North India to South India. Due to its close proximity with the sub-continent, the Middle East ended up being the ‘second home’ to millions of Indians. Air India at that time being the only available ‘flight of choice’ had the ultimate monopoly in this market. Since most of the passengers were of south Indian descent, it gave them the ultimate authority to charge huge amounts in ticket rates during the ‘most revenue generating season’ as mentioned earlier. The expatriate workers, majority of them who worked in horrible conditions and low wages, had to shell out a fortune to visit their home and loved ones. Repeated pleas from all the expatriates to the Indian/Air India authorities fell into deaf ears for decades. As Air India was heavily unionized, the staff along with the aircrafts aged.

Years after the liberalization, as India grew, the need to rejuvenate the loss making Air India gathered steam. The domestic route sibling of Air India- Indian Airlines, was forced to improve quality and maintain profitability once the domestic skies were opened up in India in the early 2000s. Bad governance (being an epitome) of the Congress government allowed it to merge both the airlines, creating employee dissatisfaction when different packages were offered to employees of both the airlines. The sheikhdoms of Middle East, realizing the decreasing potential of oil reserves, and as part of their diversification efforts, setup international airlines for each emirate, in addition to sprucing up their airport infrastructure to world standards. While Air India floundered due to internal contradictions, these Arab airlines, with easy access to capital, low cost aviation fuel and sans any tax regime prospered.

The recent news of Etihad buying a stake in Jet Airways and request for more seats from India should come as no surprise to any keen observer of this industry. I have always believed that governments should stay out of running airlines, or for that matter any service industry. Due to political compulsions and a genuine fear of the trade unions, Indian governments have always shied from taking tough decisions. By shamelessly using valuable taxpayers money, this floundering behemoth of an airline, was sustained. The corrupt trade unions, often alleged to be funded by these ‘foreign airlines’ made it a point to cripple any revenue generating option for this airline. As time passed, Air India and its much famed ‘maharaja’ became a laughing stoke for the world, and the ‘pride of India’ became a ‘shame of India’.

As I see it, the future is bad for all internationally ferrying Indian travellers. First their hard earned money paid as taxes, will be used to keep this floundering disgrace of an airline, Air India, on life support. Next since all the sheikhdom airlines (linked through family-related foreign owners) will have the ultimate right to ferry Indians out of India to their own country, as connection points. In addition to increased profits, while waiting for flight connections, Indian passengers would be forced to shop and travel around within the fancy cities of the sheikhdoms thereby bolstering their tourism prospects as well. It is therefore a win-win situation for the sheikhdom airlines. Though the ‘paid media’ and the corrupt Congress government of India might try to sell this whole proposition as a win-win for Indian passengers, I fear that the reality will be contrary.

What can be done here? I believe nothing. Lack of proper vision and any foresight on the behalf of the Indian government has led to this situation. When the same countries that produces the fuel and runs service whose economics depends on this fuel, we have all the makings of an ultimate monopoly. The past trends of the aviation industry has pointed to a centralization of the resources and power to the oil rich Middle Eastern sheikhdoms. While other countries in North America and Europe have already taken much needed steps to address this eventuality, the inaction of a paralyzed Indian polity is not surprising.

When aviator Nevill Vintcent and JRD Tata, began the Tata Air Services, it was renowned for its exceptional and efficient service. As an excerpt from the annual report of the Directorate of Civil Aviation (DCA) of India for the year 1933-34 stated the following “As an example how airmail service should be run, we commend the efficiency of Tata Services who on October 10, 1933, arriving at Karachi as usual to time, completed a year’s working with 100 per cent punctuality… even during the most difficult monsoon months when rainstorms increased the perils of the Western Ghat portion of the route no mail from Madras or Bombay missed connection at Karachi nor was the mail delivered late on a single occasion at Madras… our esteemed Trans-Continental Airways, alias Imperial Airways, might send their staff on deputation to Tatas to see how it is done.” This was the beginnings of Air India which was acquired by the government of India shortly after independence and ruined to its certain death as of today.

Can Air India ever be saved? I believe it can with a strong government resolve. First of all, I believe that the government should divest off Air India into a privately owned company, owned fully by its employees. This would give a sense of ownership to the employees and an attitude of ‘perform or perish’ takes precedence. Next the government needs to reduce the aviation sector taxes, including surcharges on aviation turbine fuel (ATF) and allow the industry to grow. Efforts should be made to encourage the advent of even far numbers of budget airlines and modern airports for every towns in India. This would generate much more employment, allow a competitive market between the railways and aviation benefitting the customers. This would encourage much faster and efficient movement of people and goods between both the native and foreign cities. Ultimately today’s modern India will have a healthy and vibrant aviation sector it can be always proud of.

Picture Courtesy: http://www.flightsimworld.com/forums/topic/109655-my-air-india-744-collection-mostly-sunset-shots/