How The Maharaja Lost His Sheen: The Story Behind Air India’s Downfall

Posted by Akshay Hariharan in Business and Economy, Politics
June 12, 2017

Air India, the national flag carrier airline of India, didn’t start out like it is now. When other airlines of that era, like Modiluft, East-West, Damania were unable to sustain themselves, Air India was soaring high and developing itself into one of the leading carriers of the world.

In fact, I personally used to admire the services of Air India to such an extent that wherever Air India services were available, I would not travel by any other airline.

So what really brought about its downfall?

It isn’t just one isolated factor but multiple factors clubbed together.

According to me, the biggest reason for the downfall is the merger of Air India with Indian Airlines. Especially when the government at the time knew that Indian Airlines was already a loss-making entity, while Air India was running well, this historic blunder had a number of consequences which nobody anticipated. The morale of the staff after the merger was affected, fleet utilisation went for a toss, route management got badly affected.

Barring this, the other factors too had an important role in bringing down the airline. One of the biggest reasons was the lack of political will to see the airline flourish. This led to having bureaucrats who lack any knowledge of the industry control top management positions, as well as the creation of new routes based on the political needs of the government.

The economic front seems to be an even bigger headache for Air India, as the revival plan seems to have completely failed and gone haywire due to faulty management. It also has a huge debt, owed for VIP services.

Air India management has also come under heavy criticism because of poor onboard facilities, faulty equipment, bad quality of food, regular delays due to VIP movements, etc.

Air India has also been a victim of stiff competition from other flight services which have come up in recent years, leading to further shrinkage of Air India passenger shares in the market. It is now at a staggering low of roughly 14% behind Indigo and Jet Airways, which is truly worrisome.

Not all is gloomy, however. Air India has recently started posting operational profits, mainly due to lower ATF, improved aircraft utilisation, improved punctuality, induction of new, state-of-the-art aircraft in the fleet, and consequent removal of age-old dysfunctional aircraft.

But the chief problem is the inability of Air India to cope up with the needs of the public today, especially in the highly competitive domestic aviation sector. The huge debt of Air India seems like a never ending tale.

The state of Air India today is such that sources in the government itself accept the fact that because of such a huge debt, nobody will be willing to buy Air India, even if a disinvestment is done today. That’s the reason the idea of disinvestment itself, for Air India, seems like a distant dream.

Therefore I personally feel that the ‘Maharaja’ has been royally screwed. Irreversible damage has been done to the airline, and the chances of once again seeing the golden days of Air India appear to be pretty low for now.

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