This 2021 archive feature traces Air India’s origins, state ownership and the financial difficulties described at the time.
Air India’s Early Flights
The airline’s origins lie in Tata’s airmail service. J.R.D. Tata flew the inaugural Karachi–Bombay mail flight on 15 October 1932, as described in Tata’s historical account.
Air India International’s first Bombay–London service was inaugurated on 8 June 1948, using a Lockheed Constellation. This was separate from the earlier airmail operation.
State Ownership
In 1953, the Air Corporation came which put an end to the privatization of these companies. Two airlines were created, Air India International and Indian Airlines Corporation (IAC). The idea was that Air India would fly on international routes while IAC would fly on domestic routes.
During its heyday, Air India did much more than ferry people. Its mascot, Maharaja, captured AI’s journey across the globe. The airlines put India on the global map by acting as its brand ambassador.
The crew members that were rigorously trained, the food that was made by the chefs of The Taj, and the best interiors designers were hired to decorate the cabins of the aircraft. The airline was considered so royal that the king and queen of Sweden flew the Maharaja as did Pope Paul VI when he traveled to India in 1964.
Financial Pressures in the Archive Account
But the good days for Air India and Indian Airlines were transient. The fall of the Maharaja began in the 1980s when its running was handed over to officials selected by the Ministry of Civil Aviation.
Air India’s chairman and managing director were appointed by the ministry for the first time in the late 1980s. Officials were selected from outside the airline to also head important positions including sales and marketing and commercial operations.
Another factor that contributed to the downfall of the airlines was the naming of more international airports. When Air India was at its peak, there were only a handful of international airports in the country including Delhi, Mumbai, and Kolkata.
All international airlines, including those of Air India, landed and took off from these airports. The naming of more international airports in India changed all that as air services bilateral with foreign countries had to be exchanged so that traffic between India and these countries could increase.
But what really added to the woes of Air India and Indian Airlines was the merger of the two into Air India in 2007. In 2006-07 Air India posted a loss of Rs 447.93 crore while IA posted a loss of Rs 240.49 crore.
In the first year following the merger, the new entity posted a loss of Rs. 2,226 crore. In 2018, Air India’s debt stood at Rs 52,000 crore. According to a survey by the government, Air India was one of the top three public sectors that incurred the highest losses for a third consecutive year in 2018-19.
The government has given the airline a bailout package in excess of Rs 30,000 crore and infused equity capital of Rs 3,430 crore over the years. However, all this did not help the Maharaja and finally, the government decided to sell its stake and pass on the baton of running Air India to private players.
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