Taking A Dive

True story: Sometime in 1999-2000 I took an Indian Airlines flight from Delhi to Lucknow for a day-trip. My return flight was around 5.30pm and passengers were boarded with a minor delay. When the aircraft was ready to leave the engine wouldn’t start. It was like a car that makes a whirring sound on ignition but wouldn’t start. We were offloaded and made to wait on the tarmac as two engineers came to the aircraft. They opened the cover of the left engine and did some minor checks and repairs. After a few minutes we were boarded again but the plane had the same problem and wouldn’t start. We were offloaded again and back came the engineers. They estimated it would take longer for the repairs so we were sent back to the terminal. We were served snacks while we waited and departure was announced again at around 9pm. We boarded the aircraft again but this time there was a new problem. You see, about a dozen passengers were quite worried about the engines so they refused to let the aircraft fly unless the engineers accompanied the flight. The arguments with the IA staff and crew lasted some 15 minutes till this group finally relented.

The dozen passengers had finally relented because an elderly passenger intervened and asked them if they expected the engineers to go out and make repairs if the engines conked out mid-air at some 30000 feet. There are some good, bad and hilarious moments I’ve had in flights with IA and AI. We did reach Delhi safely without another engine failure. Since then IA has had Alliance Air, then changed the name to just “Indian” and finally all the branches are under one brand ‘Air India’ (AI). Some years prior AI was one of the best in international flights and as Indian my preferred choice but most travellers were aware the airline was going down the drain. This is what brings me to a small review of the book “The descent of Air India” by its former executive director Jitender Bhargava (JB).    

I have often stated that Jawaharlal Nehru did not possess the foresight and vision for large country like ours. When he nationalised AI in 1953 he assured JRD Tata there would be no interference from the govt and he was true to his word. What he did not foresee is that his successors and other ministers would not stand by his word. Thus, one of India’s finest brands and world-renowned airline has been forced to take a dive. This is the story that JB tells us. The book may not exactly be exciting to read but is more like a documentary and mostly written as JB’s journey in his nearly 3-decade career with the airline. But it is a must read for anyone who wishes to acquire expertise on how to destroy a great business and a great brand.

There’s the usual union problems; with Commie political parties backing them. There are stories of pilferage of premium Whisky and stuff by the pursers and cabin crew. Excessive compensation demands, allowances and appointment of people without expertise and so on. There’s even a hilarious idea of “Kerala massage” for passengers to improve their inflight experience. There’s a case where seats were chosen not by rational purchase procedures but only by celebrities trying those out at the AI office (like Shobha De). And yes, they had a variety of expertise on the board at times, including Jaya Bachchan of Bollywood. AI had also informally shifted its HQ from Mumbai to Delhi years ago but formalised it in February 2013. This is so that the chairmen could be close to the Civil Aviation ministry bosses and other political powers. I know, you must be wondering why all of these should be coming to you from a book when AI has been going downhill for many years. Well, I always say: The media is the first line of defence for the corrupt. This may not entirely relate to corruption but since media too was scavenging on a dying airline many stories may not have come out in the open.    

Since the book covers a lot of areas of failures in AI I will stick to mostly media related issues. Let’s, therefore, digress a bit. In November 2012 I posted the article “HT Summit: How to Sell Leadership & Make Money” which showed how unrelated PSUs, some of which were monopolies and never big advertisers, were doling out money for sponsoring the HT Summit for inexplicable reasons. A majority of the sponsors were PSUs and YOUR money was being used to fund these “private parties”. I am not implying a direct connection with AI but part of the airline’s story is somewhat similar. So let’s read some edited excerpts (in blue, emphasis mine) from the book. For a start, here’s a serious way to solve your company’s problems (V. Thulasidas is a former CMD 2003-08):

As the airline’s performance careened to new lows year after year, none could stay immune to the impending catastrophe. Even Mr Thulasidas was perturbed. Instead of tacking the problems at hand with research and rationale, however, he decided to invoke the power of ‘vaastu’. An expert… from Hyderabad was appointed to guide the chairman on which angle to place his desk, where to conduct his meetings with colleagues and which doors to the conference room to keep shut or open. The changes suggested by the experts were duly carried out at substantial expense to the airline… Another example of how Mr Thulasidas prioritised his personal preferences was his insistence on being escorted to and back from work every day of his tenure. An AI employee would pick him up from his house every morning and drop him back at his house every evening. And in the mornings, as Mr Thulasidas’s car approached the AI building, the aide would call a peon at the office and ask him to hold the elevator door open.

Okay, that’s hilarious but not all CMDs are described like that. JB goes on to describe how intolerant of dissent the leaders at AI had become between 2004 and 2008. As with other PSUs given below are cases where largesse was being doled out to media houses for no reason or rhyme. JB reads it as “barter” for publicity but even he judges it wrongly.

For example, when a reputed media house was hosting its annual summit, _____ _____ extended AI’s patronage to the event without consulting the chairman. He committed the airline to 30 lakh worth of tickets by way of a barter deal in lieu of publicity for AI. When the organisers sought tickets as part of the deal, we discovered that there was no written approval or sanction for the barter arrangement. No one had any knowledge of the verbal agreement either, but it had to be honoured since the minister had already given his word.

It was the same story when it came to organising familiarisation trips for the media at the time of a new flight launch or some such affair. The minister’s office would send a list of journalists to be invited… some of these ‘journalists’ never wrote a line after their return. But our views were not taken into consideration, not even when it could have both saved the airline a substantial amount of money and ensured better publicity. In 2007, when India won the T20 cricket championship, AI was forced to release full-page advertisement in the newspapers on the specious plea that we should celebrate as almost half the victorious team was on the rolls of AI. The advertisements cost the airline 3.50 crores – this at a time when the airline was financially bleeding.

Professional cricketers with lucrative contracts with BCCI were also on AI rolls? Nice! Cricket is as much a political tool for many politicians as are the glamorous PSUs like AI. Now, what JB refers to as “publicity” is not publicity at all. Publicity could be in the form of some favourable article (even notified as sponsored) or some write-ups that talk about the airlines services or major achievements etc. JB doesn’t indicate any such return for the expense. He calls it barter purely because no cash was paid; it was just plain “sponsorship” or an “advertising dole” with nothing measureable gained in return.

Since advertising budgets had always been low, the airline has chosen its media basket with caution. But at the behest of a few people in power, AI, AAI and IA were forced to release every campaign, irrespective of whether it was relevant to the newspaper’s readers or not, in a publication owned by a powerful media magnate. Even by the most conservative estimate, advertisements worth over 10 Crore were issued to the said media house.

And the above is backed by a note dated May 3, 2005 from the Ministry of Civil Aviation complaining about advertisements going to some newspapers were not going to ____ which is a leading newspaper for Western India. So everyone had a hand in the till. Many media palms were greased. It didn’t matter to many that all this was killing the golden goose. There are, of course, other issues of purchase of fleets beyond needs and burdening the airline. Giving off profitable routes to others and even the CAG pointing out entertainment equipment purchased above normal market prices. Much of this is being talked in the media only after this book was released in October 2013 although there have been stray articles here and there.  Here’s a video from NewsX as recently as February 1 talking about free tickets in 2006 (AI is unwilling to disclose the "commercial" beneficiaries) and the courts taking notice (2.0 mins):

Surprisingly, the publisher (Bloomsbury) has withdrawn the book from the market because Praful Patel filed a defamation case against them and the author for certain comments about him or certain decisions attributed to him and a certain scam. We don’t know because the case was settled out-of-court and the book withdrawn. But even when the book was in circulation and being sold no media house seriously discussed it. The reason is obvious; it may have implicated some of them as beneficiaries of govt largesse through AI. I have found nothing that can be considered defamatory because many adverse statements against Patel are either backed by documentary evidence or by references to deals that are in the public domain. JB has stated in the press that he will now publish the book himself or have an eBook made available soon. That should be good news for those who wish to read the book. Here’s another piece from the book that explains the culture of management at AI:

Over the years, the politicians have become more demanding. They interact directly with the chairmen, in whose appointment they are likely to have played a role. During 1993-94, when Ghulam Nabi Azad was the minister of civil aviation, Russy Mody, as chairman of AI, summed up the environment well when he publicly stated, “I want to be azad, and he wants me to be his Ghulam”.

In sporting terms “taking a dive” simply means deliberately losing a match or a bout to a competitor with or without any consideration. In Cricket we are familiar with the term “match-fixing”.  AI has been forced to take a dive for many years. It may be too late to save the airline unless govt is removed from the management. It remains to be seen whether our media will take the trouble of looking into other PSUs who generously bail them out. I’m not betting on it.