The Descent of Air India (20 page)

In recent times, we have had many commentators questioning the role of politicians and bureaucrats in the decline of the airline’s fortunes. We have also seen the devastating impact that a massive acquisition programme has had on its financial viability. But the truth is that the nail in Air India’s coffin had been hammered in long before the political interference and profligate spending punctured the airline’s chances of survival. Unions and a section of the managerial cadre at the airline had begun to tear at its fabric much before anyone else.

CHAPTER EIGHT

the politics of flying

IN INDIA, GOVERNMENTAL ownership of business has traditionally evoked fears of
babudom
. It is the common perception that when the government walks into a business, commercial interests walk out of the door; politicians, bureaucrats and administrators create a web of red tape and vested interests that makes it impossible for a business to flourish. When Air India was being nationalised way back in 1953, J. R. D. Tata was openly apprehensive about its future. However, Prime Minister Jawaharlal Nehru convinced Mr Tata that this would not be allowed to happen and asked him to continue as chairman.

Air India was fortunate to have had not just Mr Tata as a leader during the early years of nationalisation but also a team of officials as committed and dedicated to the airline as he was. Old timers at Air India were full of praise for the behavioural integrity of the bureaucrats of that era. The one big difference they point out is with respect to the appointment of chief executives and the promotion process, which was not subjected to the kind of political pressures that became the norm in later years. By and large, the right people were chosen and placed in positions of responsibility in accordance with their capabilities. Also, the bureaucrats who belonged to the Indian Civil Service and led Air India in its formative years had a stature far more forbidding than their present-day compatriots. Few politicians or bureaucrats based in New Delhi dared question their decisions or doubted their integrity. All of this created a work culture that promoted initiative and commitment. Employee morale was high and even when the airline moved from propeller aircraft to 707s and then to the 747s, which occurred in the 1960s and the 1970s respectively, Air India was being managed with the professionalism of a private airline. It was fairly independent of political influence, and this protected the airline from the vagaries of governmental ownership.

I was told by Inder Sethi, who was the deputy managing director of the airline during 1979–80, about an incident that clearly illustrates the difference in attitudes within the airline. A cabinet minister called him up to ask that his son, who was employed with Air India, be promoted although he was 60
^th
on the seniority list. Mr Sethi refused to accede to the demand, saying that promotions would occur in due course and when he felt it would cause the minister the least embarrassment! However, after he left the airline in November 1980, the new chairman, who had assumed office in April that year, promoted 65 staff in that grade just to accommodate the minister’s son. Likewise, in another instance that Mr Sethi pointed out from the same period, when the airline transferred several employees from one station to another, one of them protested at being moved out of his posting in Kuwait to Nairobi. But when the airline did not give in even though his brother, a member of parliament (MP) at that time, intervened on his behalf, he accepted the transfer. However, when the new chairman, Raghu Raj, took over, the transfer was overturned.

I was discussing this turn in the airline’s approach with the executive assistant to the chairman, who used to wield immense clout in the organisation and would have known the rationale behind the airline’s decision. He explained that it was thought to be better to promote 65 officers in that grade when they realised that the minister was not going to take ‘no’ for an answer. This was one way to ensure that those who were senior to the minister’s son were not superseded. While there is merit in his logic, it reveals the manner in which pliant chairmen and disreputable politicians had begun destroying the airline’s character.

To quote Mr Sethi, who saw the shift in the airline’s priorities, ‘I remember when, in mid-1979, on a flight from Delhi to Bombay, after interacting with the ministry officials, K. G. Appusamy, the then managing director, told me: “The culture is changing and you may not be happy with the changes that I foresee. I suggest you look for another job”.’Mr Appusamy left soon thereafter and the man who replaced him was Raghu Raj believed to have been appointed under the instructions of the Prime Minister’s Office (PMO). Mr Sethi, who quit after the new chairman took over, adds, ‘Every year, I feel that Air India has reached its lowest level, but I wake up some mornings to find that a new level has been found.’

Political interference began in the early 1970s but grew rapidly after J. R. D. Tata’s exit in 1978, and in the period since then, the problem has assumed Frankenstein-like proportions. It was not as if politicians of that era did not call in favours; the difference is that the benefits they sought did not affect the day to day functioning as is the case today. For instance, they would ask for acquaintances to be appointed as general sales agents, seek complimentary air tickets for family and friends and such other considerations. Critical business decisions were left to the chairman and his team. The ministers also rarely ever called the chairmen or managing directors directly but instead routed their requests through the secretary in the civil aviation ministry.

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, Russi Mody, as the chairman of Air India, summed up the environment well when he publicly stated, ‘I want to be
azad
, and he wants me to be his
ghulam
’ (I want to be free, and he wants me to be his slave).

Air India, in fact, has witnessed three phases. The first phase saw men of substance at the helm. As part of the airline’s senior management, they could thwart unwarranted interference and reject suggestions from politicians. This was the time when the airline was at its peak in terms of performance. The next phase was one of increased political involvement, but those in charge of the airline were able to argue their case and put their points of view across. It was another story that they had to eventually give in, in some cases, but they did not treat the minister’s word as a command. The third phase, which continues to the present day, is one of total subservience. Not only do the incumbents selected with ministerial patronage allow the ministers to steer the airline according to their wishes, they also willingly seek their opinion and guidance even when they don’t interfere. The capitulation has been absolute and abject. Political interference reached its zenith during the period 2004–08. It, in fact, reached such a stage that board meetings, at times, were convened at a day’s notice, without the circulation of agenda papers. Sunil Arora, as an Air India board member and someone who was an exception to the general rule, said in a letter to the Cabinet Secretary in 2005 that the members would often receive a note asking them to take a particular decision on premeditated lines as that was what the ministry desired.

LEADERS AND MEN

What led to the sharp spike in political interference in Air India? The root cause, perhaps, is the manner in which the airline’s chairmen were appointed. While it had always been a governmental appointment, the search and selection process had been transparent earlier. The Public Enterprises Selection Board and the Appointments Committee of the Cabinet played a significant role in selecting and endorsing an incumbent. Now, whether it is because of the compulsions of ‘coalition dharma’ or the decay in our political establishment, the appointment of the chairman bears the unambiguous stamp of a minister’s authority. It has become a political appointment, and many a time, the person is chosen not for his professional calibre but for how pliant he is to the reigning minister.

The politicisation of the chairman’s post implied greater uncertainty at the top. Ministers began to shift people around if they did not toe the desired line. They also appointed friends on the board and changed members if they refused to take a particular stand or comply with the desires of the political establishment. For instance, it was widely believed that V. Subramanian, who was on the Air India Board by virtue of being the additional secretary in the Ministry of Civil Aviation, had to go because he raised uncomfortable questions about aircraft purchase during a board meeting. Similarly, chairman-cum-managing director Raghu Menon was moved out while he was on vacation because he did not share the minister’s perspective on a ground handling joint venture, and Arvind Jadhav, who had been rejected by the Appointments Committee of the Cabinet in 2008, was appointed in his place. The ministers had become all-powerful, dismissing people at will and appointing them at their discretion.

Since the incumbent chairman owes his job to political dispensation, he is quite naturally beholden to his benefactor—who could be a political leader, a minister or an industrialist with the power to influence the government. This makes him vulnerable, and as we have seen, he would not only allow greater interference but would go out of his way to seek ‘guidance’ on all issues. A far more damaging scenario was played out when a bureaucrat was chosen as chairman. In most cases, he was not invested in the airline because he knew that his tenure was likely to be brief and could be cut short further if the political dispensation so desired.

ALL ROADS LEAD TO NEW DELHI

Air India’s restructuring of its Delhi office has matched the rising political hold on the airline. Till the early nineties, the Air India office in Delhi was meant as a liaison centre to help expedite proposals pending for decision in various ministries. Gradually, as political interference grew, chairmen began posting their most trusted men in New Delhi to keep the minister in good humour and to ensure that the minister’s requirements were met without it becoming public knowledge. Later— from 2004, to be precise—chairmen began liaisoning directly with the minister. They did not let anyone else interact with him, afraid that the minister’s wishes may not be met or worried that their proximity to the power centres may be challenged. The next step, naturally, was the shifting of the chairman’s office to New Delhi.

V. Thulasidas was the first chairman to spend most of his time in the capital. As his presence in Mumbai grew more and more infrequent, he decided to set up a second home in New Delhi. Four senior managers of Air India were asked to give up their official accommodations, and their apartments were converted into a guest house for his exclusive use. Later Arvind Jadhav and his successor Rohit Nandan too preferred to operate from Delhi. This has had disastrous results for the airline. It was as if Air India were operating under an absentee chairman. After all these years, the ministry in early 2013 formalised the shift of the airline’s headquarters from Mumbai to Delhi for what it has termed ‘better’ management of Air India.

As the chairmen’s attitude towards the government changed, so did the expectations of ministers. An incident from the early nineties illustrates the change well. In 1991, Victor Paes, the father of tennis player Leander Paes, approached the then Minister of Civil Aviation, Madhav Rao Scindia, for help for his son’s travel abroad for participation in global tournaments. Mr Scindia directed the senior Mr Paes to our office in Mumbai. We evaluated Leander’s potential and within half an hour committed to providing free tickets for two years. We saw a need for the airline to step in in the national interest, and we did. Contrast this with the situation 16 years later, when the Indian team won the T20 cricket championship. The Minister of Civil Aviation, Praful Patel, did not think it necessary to consult Air India before awarding the entire cricket team and family free tickets for five years! To clarify, the issue is not that it was not in the nation’s interest to let our cricketers fly free but whether a minister should have taken the decision on behalf of the airline.

ABSOLUTE OBEDIENCE, NO DISSENT

Between the years 2004 and 2008, the airline’s leaders had grown intolerant of dissenting voices. All of us had experienced the change in attitude and witnessed the emergence of a coterie culture during these years. If one protested publicly, the offending individual would be transferred to a different department or position or sidelined in his job. And as more and more people realised that it was better not to oppose the minister or the chairman, decisions began to be taken unilaterally. There were times when the minister took decisions on the airline’s behalf and we were informed about it either through the media or after things had already been set in motion. Even vendors or those seeking sponsorship arrangements with Air India would approach the minister directly instead of the chairman or the relevant management personnel. For example, when a reputed media house was hosting its annual summit, Praful Patel extended Air India’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 Air India. 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.