The heartening news is that a unit of the iconic Tata conglomerate has acquired the Air India and its subsidiary Air India Express. The Tata group will get back its own child after 68 years. But the child is gravely ill and requires critical care without which it will perish soon. The Tatas are dishing out a whopping Rs 18,000 crore for a unit that’s making 20-crore daily loss. Further, the Air India has an astronomical debt amount of Rs 83,916 crore.
The Tatas will get ownership of only the lossmaking brands like Air India, Indian Airlines & the Maharajah with a fleet of 117 wide-body and narrow-body aircraft and AIXL has a fleet of 24 narrow-body aircraft half of them on lease, not owned. Though bound to make loss for quite some time, the Tatas have acquired Air India for sentimental reasons only. And for sure, they will turn it around with their superb professional skills.
It would be appropriate to share some unknown truths about why and how a vibrant outfit lost all health and lost lustre.
On a bitingly chilly morning of 2012, a horrendously rattled Praful Patel, sweating from head to foot, dashed off an SOS letter to Prime Minister Manmohan Singh to save the country, the Ministry and the UPA only by protecting him from a criminal case initiated by the Royal Canadian Mounted Police (Canadian counterpart of CBI) that probes shady arms deals and corrupt activities by citizens abroad. How Manmohan Singh responded to him, no one knows till date.
But it was universal knowledge that the national carrier Air India was once upon a time synonymous with luxury air travel because of its unmatchable royal hospitality. It was the first choice of wealthy, fussy passengers and also famous for making impressive profits never below Rs 100 crore annually until 2004 when Praful Patel took over as Civil Aviation Minister. Air India began losing money right from next day; and by 2011, it was ailing with a debt of Rs 4,000 crore and an accumulated cash loss of Rs 7,000 crore. It became bankrupt with frequent pilot strikes, employee agitation, chaos and insoluble financial problems.
Before the Canadian authorities had sent him notices, Patel was already in trouble with allegations about the airline mismanagement. The Air India required just 28 aircrafts urgently and nit even one more as advised by domain experts. But Patel found that number beggarly. He ordered for 68 aircrafts, including 18 Boeing 737-800, 23 Boeing 777 long-range and extreme-range, and above all 27 prohibitively priced ‘Dreamliners’ specifically rejected in the feasibility study. But he laughed off the expert recommendations and made the public bleed 50-70 billion rupees by having all these ‘white elephant’ aircraft ordered. Eventually, 50 wide-body and 18 narrow-body planes arrived, but the ‘Dreamliners’ never showed up. The sickened airline asked the manufacturers for compensation for breach of contract, to which Patel disagreed. Patel had also coerced the IA chief to buy fancy aircrafts, but the latter, an honest professional, did not pay any heed. For the Air India deal, a letter from the Ministry was forwarded to CMD DV Thulasidas saying the Hon’ble Minister had directed the CMD to acquire the aircrafts. However very strong objections were made by Additional Secretary-cum-Financial Advisor V Subramaniam who insisted on revisiting the proposal of excess plane purchase. A high-level committee headed by CG Somaiah, included a number of Secretaries and a group of Ministers was kept in total dark about the objections made by the FA. Somaiah was immediately shunted out of the picture within only a week lest he should reveal the truth about non-viability. A 500-billion rupee worth of aircraft for a 70-billion turnover company was forced upon the nation. Patel interestingly had also turned the advocate-spokesperson for Goyal and Vijay Mallya when he pressed for allocation of all profit routes to Jet and Kingfisher airlines under the plea of encouraging entrepreneurship.
Praful Patel’s daughter Poorna Patel, a hospitality manager with the IPL (T-20 cricket), had an Air India craft chartered for ferrying IPL players from Chandigarh to Chennai, compelling the cancellation of a scheduled Coimbatore-bound passenger flight IC- 7603. In another incident, Praful had got the type of aircraft changed from Airbus 312 to a much larger Airbus 320 on the Bangalore-Male (Maldives) route in 2010 for a pleasure trip. By this time, Air India, once the pride of India, was virtually gasping for breath with no funds in hand and no top-grade pilot willing to fly suspect-quality planes.
Thus, the Air India was virtually finished by 2012. Praful’s personal empire’s head office called the “Eeeja House” is a gleaming 14-storied structure which got glossier and brighter every next day. He was declared the wealthiest Minister in the country as per the declarations made by him. His father had set up a bidi factory which gave them livelihood. So they call him ‘Beedi King’.
Beauty and money, he imagined, made a person invincible. But the deadliest letter from the Canadian Government made him witless.
The Royal Canadian Police was first alerted by the popular newspaper ‘Globe and Mail” which carried the huge kickback story. The story talked of Indian-origin businessman Nazir Karigar who had paid 2,50,000 dollars through his Indian contacts through a friend, Laxman Dhole, who paid the amount to Praful. Hasan Gafoor, a former Mumbai Police Commissioner, and then the Director of Security at Air India also happened to be a chum of Nazir’s. Gafoor’s father was the Collector of Solapur and Nazir’s father a wealthy businessman with factories and textile mills in the same town. Nazir wanted to pull a contract for a software that read boarding passes and recognised human faces, manufactured by Cryptometrics, the firm he represented. The Canadian daily described how allegedly Hasan Gafoor had conspired with Nazir Karigar to rig a contract of 100 million dollars with Air India after a Minister agreed to help. Eventually, since the deal never came off, Karigar spilled the beans before the then Canadian Trade Commissioner in India Annie Dube, who in turn alerted the RCMP in Canada where new law is to nab the culprits involved in fraud or corruption by a Canadian citizen in a foreign country.
The bilateral agreement empowers the Canadian authorities to probe in India. Hence, the cold sweat rolling down the great Minister’s body.
