Knifing the Maharaja by Proloy Bagchi SignUp
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Analysis Share This Page
Knifing the Maharaja
by Proloy Bagchi Bookmark and Share

The news has just come in that the Government of Maharashtra has offered Rs. 1400 crore for the iconic Air India building at Nariman Point in Mumbai. Though the amount offered is Rs. 200 crore less than what was declared as the reserve price the Air India authorities were seemingly inclined to give away the building to the state government. The Life Insurance Corporation had offered Rs.1375 crore and the Jawaharlal Nehru Port Trust had put down its offer at Rs. 1200 crore. Hence, by June-end one could hope the Maharashtra Government offices to move into the building. Perhaps even the chief minister is likely to relocate to this building and one might find the National Flag on top of it instead of Centaur of the logo of Air India. 

This building has been a remarkable structure dominating the business district that came up on what came to be known as Backbay Reclamations. I can recall that during my first visit to Mumbai (which was then Bombay) in 1955 tetrapods used to be built there as the work of reclamation went on. It was a vast expanse of sand and tetrapods would be lined up for being placed next to the parapet of Marine Drive along the Arabian Sea. Then this iconic building slowly took shape designed by an architect from New York. Facing the beautiful Marine Drive it came to dominate it, adding more sophistication to an already sophisticated artery lined by art-deco buildings.

Air India is steeped in debt of around Rs. 50,000 crore and had decided to monetise its physical assets. It had put up its lease-hold rights over the land and the building for sale last December with a reserve price of Rs.1600 crore. The sale was open to only the various governments, their departments and public sector units. None of these entities, however, could muster an amount equal to the reserve price; the offer of Maharashtra Government happened to be closest to it. In all probability, therefore, the Maharashtra government offices are likely to move in in a few months time.

Air India hit this sad predicament largely because of politicians who came to control the airline. Time was when Air India, to use a cliché, used to rule the skies and other up-and-coming airlines would try and learn micromanaging their assets from none other than its chief JRD Tata. Tata was a freak in so far as flying was concerned. His commitment to the airline from its initial days when it had only 2 pilots and a few sundry employees was basically the reason for its becoming an exemplar for others. In the 1960s when Air India was still flying propeller-driven planes connoisseurs would still opt for the slower Indian planes than the faster jets for the simple reason that the Air India would pamper them. For the sake of the high quality service they would think nothing of sacrificing a few measly hours that could earn them a few thousand dollars. 

That is when it suffered the first assault from a politician. In the 1970s Morarji Desai as the prime minister issued a dictat that no alcohol could be served on Air India’s international flights. JRD Tata fought the fiat tooth and nail but had to resign as Morarji was as, if not more, resolute than Tata. With the exit of Tata, service standards dived southwards and the clientele that Tata had built up progressively deserted the Airline. At the same time competition hotted up and those who were pigmies when Tata was around put more heft in their operations and left Air India miles behind.

Then came the era of “coalition compulsions” – UPA’s two terms at the Centre that administered blow  after blow to the Airline that had the sobriquet of “Maharaja” and was soon enough to lose all the trappings of royalty leaving, people asking “who killed the Maharaja?” No, none from the outside; it was a well executed inside job. 

While unaffordable order for as many as 111 planes were placed the Airline inexplicably surrendered profit-making routes to Middle-East/ South-East Asia and Europe to its competitors. The Public Accounts Committee, when seized of the matter, found that it was the Ministry of Civil Aviation that would not listen to protestations of the Air India and Indian Airlines and surrendered to their competitors what were essentially milch cows for them. Thus we had a situation where Indian planes would fly half empty to these destinations airlines like Emirates would rake in unconscionable plane-loads of air traffic from the Indian hinterland in the new environment of generous “bilaterals” under India’s curious version of “Open Skies”. Air India, thus, lost out to foreign airlines under the direction of the Ministry of Civil Aviation the traffic that legitimately was its own.

Everything that was done to bring the Airline down was done by the Ministry of Civil Aviation which in those turbulent days was being headed by Praful Patel who was a contribution to the United Proressive Alliance I government of Dr. Manmohan Singh of, ironically, Nationalist Congress Party, headed by that old predator Sharad Pawar. No “nationalist” with the slightest of feelings for the nation and its people could ever have shot down a high flying asset of the nation like Air India in the way Praful  Patel did. 

R Jagannathan, Editor in-chief of the perceptive First Post wrote in a feature the technique adopted by Patel to kill Air India. Basic proposition was to load it with heavy loans that it could never raise its head again. An airline with a revenue of Rs. 7000 crore was asked in 2004 to take on debt of Rs. 50000 crore – the cost of the new aircraft the number of which was arbitrarily inflated from 28 to 68 without any revenue plan or route map for deployment of the additional aircraft.

Likewise, Jagannathan says Patel was a great promoter of merger of Air India and Indian Airlines by pitching up the synergetic operations of both. However, in the process he forgot that both the airlines were incurring losses and were in every other way were unequal. Their manpower was differently trained, the compensation mechanisms were different and so on. The ultimate result was neither could pull the other up from the morass each was sinking into. No wonder, both, together, have run up a huge resources crunch that, many experts feel, is impossible of mitigation.

In the midst of this unmanageable crunch again the Ministry (read Patel) decided to withdraw Air India from the profit making routes that largely sustained it. What one gets to feel is that it was the best example of crony capitalism; for example, the lucrative S-E Asian routes were surrendered to Kingfisher Airlines – an airline that Patel used to patronize while flying between Delhi and Mumbai. Vijay Mallya was apparently much more than a friend; in fact, a crony.  

While bringing down the “Maharaja” Patel seems to have covered his tracks very well. In achieving what he achieved he moved his files at supersonic speed from one authority to another. Every establishment concerned was kept in the loop so that the murder of the airline could be presented as a “collective and consensual” effort. 

Even the prime minister was kept aware of the moves. Any other right thinking PM would have sat up and taken note of the merry hell that was being played around by one of the reps of his coalition partners. But under his dictum of “coalition compulsion” he kept his eyes, ears and mouth tightly shut and allowed the loot to go on not only in the civil aviation sector but in many other sectors too. One is probably yet to see a man presiding over an Indian government oblivious of the rot that his cabinet colleagues were facilely inflicting on sector after sector of the economy.

He now has the temerity to say that Modi has ruined the economy. Huh!

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26-May-2019
More by :  Proloy Bagchi
 
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