Air Transport World

Can Air-India survive?

Managing Director Michael Mascrenhas is optimistic; some of his colleagues are not. ATW investigates

Air-India, once among the world's top airlines and certainly at the top of the league in Asia, over the years has slipped behind. It has found itself enviously watching its regional rivals overtaking it in terms of routes, fleet and passengers.

What was particularly galling was that many of them--Singapore Airlines, Malaysia Airlines, Kuwait Airways and even Gulf Air and Saudi Arabian--had relied upon expatriate Indian staff drawn from Air-India to set up their own operations, engineering bases and training facilities.

Founded in 1932 by J.R.D. Tata, regarded as the father of Indian civil aviation, Air-India retained its private airline ethos long after it went into state ownership in 1953. Tata, despite his responsibilities as head of a huge industrial empire, remained chairman for 25 years in the post-nationalization era and kept a firm grip on Air-India's affairs. Because of his status and prestige, he was able to insulate the airline from too much government interference.

Tata always maintained that Air-India must have the latest and best aircraft. In 1962 it achieved the distinction of being the world's first all-jet carrier with a fleet of six 707s. The 747 also was his choice. Both drew criticism but Tata's view prevailed, and after some initial hiccups the aircraft did contribute to the airline's profitability and success. Some have suggested that "I-am-one-of-the-big-boys" complex is one of the reasons for Air-India's later problems.

Tata wanted the carrier to combine western efficiency with eastern hospitality. The result was excellent service and an unusual mascot called the Maharajah, who was equally at home on Sydney beaches or as a bowler-hatted Englishman. Air-India also was distinguished from other airlines by its aircraft decor, hostess uniforms and cuisine. It was the first to adopt the sari as a uniform for its hostesses and to serve attractive vegetarian meals.

Everything changed with the coming of U.S. deregulation in 1978 but the ripple effect was slow to reach India. For quite a different reason, 1979 proved to be a traumatic year for Air-India. A parliamentary committee launched an investigation of the airline and published a devastating report. "We haven't quite got over that," says Commercial Director H. S. Uberoi, who has been with the airline for 39 years. "People are still hesitant to take decisions."

Two years later another blow fell. A 707 that was to carry Prime Minister Indira Gandhi on a tour abroad was found to have its control cables partially cut. The result was that the government grip over Air-India's affairs became stronger.

In the '90s the pace of change in air transport accelerated everywhere, even in India. Air-India was caught off guard to some extent because at the start of the '90s it was posting ever-higher profits, ending 1992-93 with a record surplus of $105. …

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