Click to play videoNew Delhi: On June 8, 1948, the Malabar Princess took off from Bombay, bound for London, via Cairo and Geneva. The flight of the Lockheed Constellation created history - it was Air India's first international flight.
The airline that JRD Tata nurtured and the first airline in the world to have an all jet fleet, is now reduced to passenger unfriendly and loss-making organisation.
Air India is now losing Rs 26 crore everyday with the accumulated loss of over Rs 13,300 crore. As a result, the airline is struggling to pay its 41,000 employees, double the number it should have.
"Air India once was a great airliner. You had a golden opportunity in 2007, when new aircraft were inducted. You could have transformed it," said former Managing Director Jitendra Bhargava.
In 2004, India announced an Open Skies policy, allowing private Indian carriers with a 5-year record to fly abroad. Foreign carriers were allowed in large numbers. As a result, fares fell and Air India and Indian Airlines started to bleed.
The profitable Gulf routes were taken over by more competitive, younger airlines from the Middle East. Overstaffed, and with an ageing fleet, India's flagship carrier was never able to catch up.
The 111 Boeing 777 aircraft ordered to help Air India's turnaround, is today a burden. The airline is paying Rs 7 crore everyday as interest on the loan taken to buy the fleet.
"For the working capital loan, by the time company realised, Rs 15000 crore has been taken away in loan by early 2008, on which interest was being paid. So, this resulted in huge losses," said Jeetendra Bhargava.
Air India merged with Indian Airlines in 2007. Post merger, the combined loss of both airlines more than doubled to over Rs 2000 crore and doubling again to Rs 5000 crore the following year. Consulting firm Accenture had predicted profits after the merger, but they were never questioned.
Four years later, human resource issues are still to be sorted out.
"All the pilots in Air India should be paid by one single agreement of Air India. We should get our arrears of three years," said Air India Captain VK Bhalla.
The government has pumped in Rs 2000 crore to bail out Air India, but with Air India losing nearly Rs 800 crore every month, is it all money in the air?
(For updates you can share with your friends, follow IBNLive on Facebook, Twitter and Google+)
displayed with permission. Use of the CNN name and/or logo on or as part of CNN-IBN does not derogate from the intellectual property rights of Cable News Network in respect of them.