Opening the Pandora’s Box- What Went Wrong with Air India?

The explosive revelations by Vinod Rai, former head of CAG, on Air India's expensive acquisition of aircrafts, has once again opened a Pandora's box and revealed two distinct things. In the first place, it revealed how in the name of policy decisions, some of the most blatant and bizarre decisions were taken which were not in the interest of the nation but invariably they were in the interest of some vested interests. Secondly it also revealed why organizations like CAG need more of enforcement power to correct the anomalies.
What Really Happened with Air India?
However those who thought that the buck with UPA stopped with only the Coal Block allocation scam and the 2G scam, the saga of how the then Civil Aviation Minister Praful Patel literally forced the Air India Board to increase the size of the order for new planes from 28 to a whopping 68 planes at a total cost of Rs 50,000 crore, proved that more surprises are awaiting with respect to suspicious cases of wrong doings during UPA regime. The Air India deal for 68 aircrafts was financed with a back breaking 97% debt proportion, good enough to make a company perpetually bankrupt and mired in debts.
This decision was taken during UPA-1 regime. Not only Air India was made to buy 40 more planes than its original requirement for 28 planes, in the same time Indian Airlines, later named as Indian was also buying 43 aircrafts. While Air India was buying from Boeing, the Indian orders were for Airbus.
Did it help Air India to go for such deals with 97% debt?
In other words, the two state owned carriers were together made to buy 111 aircrafts and then they were merged into one entity thereby creating duplicity of fleet. The merger of Indian and Air India was not just ill conceived but was done in haste without any proper revival plan for the national carriers in place. Today the combined entity named Air India Limited which runs Air India, is in a mess and is one of the worst performing PSUs of the country.
While the former Civil Aviation Minister Praful Patel has been trying to justify his act by stating that it was a collective policy decision, the biggest question that remains unanswered is what kind of a policy decision would allow a company to buy aircrafts which are not needed and that too with a 97% debt component? The Air India deal for huge number of aircrafts certainly, it seems, ended up benefitting many but not Air India.

Systems failure in Air India

What do some senior bureaucrats do when they hang up their boots? Like Vinod Rai, former Comptroller and Auditor General, they assign to themselves the task of pointing out the warts in a system they lived with for decades. (Whether they should have done so earlier, or rather, been permitted by the system to do so while in service, is a moot point.)

In his book, Not Just An Accountant, he talks about how one-time aviation minister Praful Patel “nudged” Air India to take a decision to acquire aircraft.

Rai is certainly not the first to point to shenanigans in the workings of this airline. Jitendra Bhargava, who spent close to 30 years in Air India, has also alluded to interference by various government functionaries in the Maharaja’s functioning.

Air India to axe more loss-making routes

New Delhi: State-owned Air India (AI) aims to substantially cut the number of routes not meeting variable costs, to reduce these to 19 per cent of its overall network by the end of the current financial year.

The carrier, which operates about 480 daily flights in the international and domestic sectors, had brought down the number of routes not meeting variable costs to 38 per cent of its network by the end of 2013-14, from 60 per cent.

Why Indigo survived while Air India fumbled

Air India vs. Indigo is a favorite case study in management schools. In 2004, when Air-India was piling up aircraft with a capex of around Rs 38,000 core, its private sector competitor Indigo was entering into long-term contracts with Airbus Industries so that deliveries could be staggered into the future to suit its needs.

A long term contract not only protects the price line for the buyer even if it contains a price escalation clause but also ensures that equipment, grounded or flying, are not piled up unnecessarily. There cannot be a greater waste for a commercial organization than unused capacity.

An army man can rest in his barracks but an aircraft cannot be made to idle in its hangar.

Air India set to send pilots to fill shortfall in Express service

Mumbai: The Air India board has cleared a proposal for sending its pilots on deputation to its budget arm, Air India Express, which has been facing shortage of commanders for some time now, airline sources said today.

The move would help Air India, which may face the problem of having excess pilots as the airline's Boeing 777-200 LR fleet is being phased out and shrinking, they said.

Air India sold aircraft to Etihad at 1/5th price, says ex-CAG

Former comptroller and auditor general (CAG) Vinod Rai has made more damning revelations about Air India's plight under former Civil Aviation Minister Praful Patel's regime.

In an exclusive interview to The Times of India, Rai has said that Air India sold Boeing 777 aircraft to Etihad at one-fifth the original price, thus incurring a huge loss.

The new disclosure comes just days after he alleged in an interview to Times Now that Patel “nudged” Air India’s board to increase its order for planes from 28 to 68, causing it to sink under debts. (Read our editor R Jagannathan's piece on how Air India's decline here.)

Air India flyer eats half of a worm served in breakfast

New Delhi: In a glaring instance of Air India's (AI) shoddy service, a chief engineer in the Merchant Navy had to go through the shocking experience of eating a good half of a worm that got mixed in the breakfast served on Pune-Delhi flight No. AI852 on September 11. By the time the passenger, Mahesh A. Patil, saw the worm, he had already eaten half of it along with the garlic sautéed spinach and peas served with spring omelette.

Praful Patel forced Air India board to buy 40 extra planes, says former CAG

New Delhi: Former Comptroller and Auditor General of India (CAG) Vinod Rai has claimed that former Union Minister of Civil Aviation Praful Patel had pressurized the Air India board to buy an extra 40 planes.

Rai said that Patel put pressure on the Air India board during his tenure at the Civil Aviation Ministry, which caused the flag carrier to purchase 68 planes instead of the 28 that it was originally to be bought. These extra planes, said Rai, were bought at a cost of Rs 38,000 crore.

Flights to resume from Pantnagar Airport from Oct 1

Almora: There is some good news for all those visiting Nainital and Ranikhet during this festive season. If things go well, from October 1, flights from Delhi to Pantnagar in Udham Singh Nagar District are set to resume.

GD Joshi director of Pantnagar Airport has confirmed the news. Air India's sister concern, Alliance Air, will operate four round-trip flights from Delhi to Pantnagar in a week.

"The officials from Airport Authority of India visited the airport last month and gave us a feedback report on whether flights could operate from the airstrip. On the basis of their report, we are working out plans and are hopeful to make the airport ready by October 1," said Joshi.

Air India pilot turns up late; airline maintains flight delay due to ‘operational reason’

Air India Flight AI-0665, bounded from Delhi to Mumbai was due to take off from the Delhi airport terminal 3 at 8.00 am on September 9, 2014. But due to some operational reason the flight did not take off. When the passengers had a heated argument with the Air India counter staff as they waited to board the plane, on enquiring they came to know that the pilot of the flight did not turn up. The flight was scheduled to depart at 8.00am and arrive in Mumbai at 11.am, terminal 1A, but due to some functioning problem the flight got delayed.

Air India pilots warn of exodus over pay cut, backlog

New Delhi: Pilots of Air India are up in arms over 25% pay cut inflicted by the management for past two years along with a backlog in payment of that reduced salary. They have warned the airline that "morale of employees is at an all-time low" and appealed for an "amicable solution to pending issues".

In a thinly veiled warning of a mass exodus, the Indian Commercial Pilots' Association (ICPA, union of erstwhile Indian Airlines) has written to AI's outgoing chairman Rohit Nandan that "Where other airlines are doing roadshows and advertising aggressively for pilots, we feel our loyalty to AI is being construed as our weakness."

Air India May Not Get a Private Sector CEO

New Delhi: State-owned Air India Ltd is unlikely to get a chief from the private sector anytime soon after current chairman Rohit Nandan completes his tenure, with the government drafting guidelines seeking to make the position a preserve of the civil services.

The aviation ministry has sent the new guidelines to the department of personnel and training, according two government officials who declined to be named. The post of Air India is likely to be advertised soon. The eligibility criteria for becoming the next Air India chairman requires one to be an Indian Administrative Service (IAS) officer of the rank of additional secretary or a joint secretary with a certain level of experience.

Air India, DGCA Fail To Respond To RTI Query, May Get Show Cause Notice

Amidst the controversy of preferential treatment meted out to Parliamentarians, aviation regulator Directorate General of Civil Aviation (DGCA) and debt-ridden Air India have failed to respond to a RTI query regarding free air travel of MPs, the airline's board directors, employees and their family members, which was filed earlier this year.

The Central Information Commission (CIC) has now directed the national carrier and DGCA to respond to the RTI application immediately.
"The Commission directs respondents from Air India and DGCA to provide information to the appellant as sought by him in his RTI application dated 19 February 2014 as per the provisions of the RTI Act, within 2 weeks of the receipt of this order, under intimation to the Commission," directed CIC in its order.

AI Maharaja Has a Big Heart Too

Chennai: Forget being on time. An Air India plane took off early from Bangalore and made it to Chennai almost 15 minutes ahead of schedule, to bring a cadaver heart to its waiting recipient, on Wednesday.

This is particularly praiseworthy, given that the pilot of AI 264 was flying almost non-stop from Male to Thiruvananthapuram, then to Bangalore and finally to Chennai.

“Normally, the plane leaves at 3.30 pm and arrives in Chennai at 4.30 pm. But given the hurry today, the pilot had passengers board early and there was push-back at 3.22 pm itself,” said an Air India spokesperson.

As the heart was harvested in Bangalore at 1.30 pm, it needed to reach the donor within four hours, making every minute saved, vital.

This is the first time a cadaver heart has crossed state lines, particularly by air. A few years ago, a liver was brought by road and transplanted, but it has not been attempted for hearts before.

Recently, a liver was airlifted from Chennai to Coimbatore and another organ vice-versa, making a strong case for organ transport by commercial flights.

Air India must share travel freebie information: CIC

New Delhi: The Central Information Commission has directed the cash-strapped national carrier Air India to make public information on free travel facilities provided to their top brass, ministers and parliamentarians.

Information Commissioner Yashowardhan Azad directed the Air India to make public this information within 15 days and also issued a show cause notice to the airlines to explain why it did not give information within mandated 30 days period.
"...submit written submission, latest by 10th October, 2014, to show cause why penalty should not be imposed on them under Section 20 (1) of the RTI Act, for not providing information within the prescribed period under the RTI Act," Azad said.

AI to use Dreamliners on metro routes in peak hours

New Delhi: Being a desi full service carrier ( FSC) is no longer enough. Tata-Singapore Airlines' soon-to-be-launched JV Vistara's announcement of introducing "uber luxury" has led to Air India and Jet joining the race to be the best in the full service segment. While which airline emerges ahead remains to be seen, the consumer is the clear winner in this race.

Air India on right path to turn profitable by FY17

New Delhi: Seven years after the merger of erstwhile Indian Airlines and Air India was announced, the national carrier drew some criticism last week for celebrating 'Air India day' on August 27 - the day in 2007 when the merger process formally began.

The criticism was over alleged waste of a large amount of money when the airline is bleeding — a charge the management has vehemently denied. While the issue is still being debated in the media, a look at Air India's progress in the last two years shows that the airline has surely done some things right.

Wheelchair charges upset Air India passengers

Dubai: Air India Express passengers who require wheelchairs are crying foul after being levied a hefty charge for the service.
The family of Indian national Talat Khan who recently flew to Lucknow from Dubai said they were shocked when they were asked to pay over Dh300 to have Khan wheeled into the aircraft.
“My mother is 70 and has had both her knees operated. She genuinely needed a wheelchair. Since it was too expensive, she decided to walk. But she had to take the help of other passengers while disembarking the bus and making her way up to the aircraft,” said Khan’s daughter.

In a special offer, Air India increases baggage weight limit

Muscat: Passengers flying on Air India from Muscat can now carry up to 40 kgs of baggage to all direct and indirect destinations, a top official from the airline said.

Amresh Choudhary, country manager of Air India, told Times of Oman that the airlines will also be adding three more flights to the existing ones to south Indian destinations from October 26.

"We will offer 40 kgs as check-in baggage allowance for every adult and child passenger travelling to all direct and indirect destinations ex-Muscat. For example, in case of a passenger travelling from Muscat to Goa, Lucknow or Jaipur, his baggage allowance will be valid until his hometown, subject to the fact that he is only transiting via Mumbai or any of our other online destinations," Choudhary said.

Shocked Air India says website blocked by US, Indian cos in wake of Rs 100 ticket offer

New Delhi: Air India's website, which went down two days ago after the airline offered a special fare of Rs 100, was apparently blocked by a few sites in India and abroad for a considerable time.
An unprecedented 80,000 hits a minute were recorded from some sites which blocked Air India bookings by genuine passengers, the national carrier's Information Technology (IT) team found during internal investigations.
The IT team identified at least four sites in India, four in the United States and one in Singapore, which were blocking others from getting into the ticket booking engine, airline sources said.
The massive hits led the website's NIC server to turn erratic, they said. Almost all Indian-government websites are developed and managed by the National Informatics Centre (NIC).
Following the massive load on its website, the airline increased the number of its servers from four to eight, the sources said, adding a large number of tickets were sold at the offered rate but did not elaborate.
Read news in full 30/08/14 PTI/Financial Express