May, Civil Aviation, and Bankruptcy: Casualties of India's Airline Business

As millions of Indians became first-time flyers, intrigue and manipulation was rife in the civil aviation sector.

(This is part one of a four-part 'May' series that revisits significant historical events or policies and how the lessons learned from them continue to be of relevance in present-day politics and society. Read part two here, part three here, and part four here.)

5 May 1993, was a day replete with nostalgia and a sense of déjà vu for the legendary J R D Tata. That day, he joined Naresh Goyal, Chairman of the fledgling Jet Airways on its maiden “charter” flight from Mumbai to Ahmedabad (Jet would launch full commercial operations in 1995).

For JRD, the memories would have gone back almost 60 years to 1932 when he piloted the first commercial flight of Tata Air Services from Karachi to Mumbai on a Puss Moth aircraft. Tata Air Services would go on to become Air India, a world-class private airline ahead of its times “nationalised” by India’s first prime minister Jawaharlal Nehru in 1953. When JRD boarded that flight on May 5, 1993, he must have anticipated bright days ahead for Indian air travellers and for the civil aviation sector.

But he could not have anticipated the ironical twists and turns that would unfold in the Indian airline business. Like, according to unproven allegations, Naresh Goyal might be lobbying with the powers that will successfully stymie the reentry of the Tata group into the business via an alliance with Singapore Airlines. 

Naresh Goyal himself would become a casualty as Jet Airways went bankrupt because of intense competition and stopped flying in April 2019. And that the Tata group would get back Air India into its fold by successfully bidding for it in January 2022, exactly 90 years after JRD launched civil aviation in India almost 70 years after losing it. Perhaps Indian civil aviation can now regain the glitter and glory promised by JRD so many decades ago, a promise nipped in the bud by “socialism”.

Aviation and Mobile Telephony

Ever since the regime of P V Narasimha Rao allowed private entities to operate airlines, the story of civil aviation in India has been a gripping tale of soaring and crashing dreams; intrigue and manipulation; ruined reputations; alleged scams; mafia involvement, and more. But above all, it has been a story of middle-class India finally flying high and of aspirational Indians taking their first flights, something they could not even have dreamt of when the 21st century came calling.

The mafia involvement is mercifully a thing of the past. Well before Jet Airways took off, a mysterious entity called East West Airlines had taken to the skies. It was a roaring success and became famous for offering free flights to Mother Teresa. But there was always a whiff of danger and of UAE-based mafia dons and gangsters waiting to control East West. The tale ended in tragedy when the founder Thakiyuddin Wahid was waylaid in Mumbai on the way to the office in November 1995 and peppered with bullets in broad daylight. The authors did some Google digging but could not find if the murder case was solved. Those were anyways salad days for the mafia in Mumbai where extortion and executions were rampant. Music tycoon Gulshan Kumar too was pumped with bullets in broad daylight in front of a temple and the case is yet to be closed.

Coming back to private airlines, the accompanying chart shows how the number of Indians flying has grown almost 20 times between 1991 and 2019 (air traffic collapsed in 2020 thanks to Covid). A closer look reveals that air traffic has skyrocketed since 2005 and mirrors the explosive growth in the mobile telephony business. Between 1995 and 2005, the number of mobile phone subscribers had grown to 98 million. In the next ten years till 2015, it grew to 1,000 million.

The reason is simple: mobile usage costs fell sharply; as did airfares when low-cost operators like Air Deccan and then Indigo launched operations.  The authors still recall the years 2005 and 2006 when tens of thousands of “first timers” would crowd the airports with home-cooked “tiffins” and chaos as most were not familiar with check-in or security protocols. But they were heady days and heralded the arrival of aspirational Indians. Elite columnists and commentators wrote snarky pieces mocking the first-time flyers. But they missed the pulse of real India and the soaring ambitions of the “unwashed masses”.

The Wheels are Turning Full Circle

Even as millions of Indians were becoming first-time flyers, intrigue and manipulation was rife in the civil aviation sector. Ratan Tata, who inherited the mantle of the Tata group from JRD was really keen for the group to make a comeback in the airline business. In 1994, the Tata Group signed a joint venture agreement with Singapore Airlines to launch a full-service airline in India. For mysterious reasons, the prestigious project failed to get a nod. Many pointed fingers at the founder chairman of Jet Airways Naresh Goyal for lobbying successfully with the powers that be to stymie the project.

But these were unproven allegations. It was almost 20 years later that Tatas and SIA came together again to launch Air Vistara. There was much more intrigue. NCP leader Praful Patel was the civil aviation minister in the Dr Manmohan Singh-led UPA regime. Air India and Indian Airlines were merged during this time, a decision that turned out to be disastrous for both government-owned entities. There were many allegations against Patel. Of forcing the state-owed airlines to place orders for hundreds of aircraft without proper planning and of doling out lucrative bilateral landing rights on a platter to foreign airlines at the cost of domestic operators. None of these allegations have been proven, of course.

In fact, a former chairman of Air India Jitendra Bhargava wrote a book that reiterated these allegations. But Patel was successful in getting a court order to stay the further publication and sale of the book. But perhaps the most high-flying casualty of this turbulent sector has been Vijay Mallya, the so-called King of Good Times.

The liquor baron launched Kingfisher Airlines with pomp and glitz in 2005. The good times lasted till 2012 when the airline went bankrupt, owing thousands of crores to Indian banks. Mallya fled India in 2016 and has lost all extradition cases filed against him by Indian authorities. But Mallya has not been extradited back to India because the British Home Ministry is yet to take the final “political” decision to send him back to India to face trial.

But above all, the story of civil aviation in India since that landmark day of 5 May 1993 is now about the wheels turning full circle. Naresh Goyal, who was accused of sabotaging the efforts of the Tata group to reenter the business saw his Jet Airways go bankrupt in 2019. In 2023, the Tatas have complete control of Air India, 70 years after it was nationalised. Once upon a time, Air India was one of the most prestigious airlines in the world and the sky was literally the limit. Nationalisation and poor management allowed other airlines like Singapore, Emirates, Etihad, Qatar, and many others to become the go-to for Indian travellers.

But things change. During a media interaction in June 2022 after the Tatas had regained control of Air India, the CEO of Emirates Tim Clark remarked: “I think the best thing that could have happened to Air India was for Tatas to take it over. I am probably the only one in this room who flew on Air India when it was run and owned by Air India. And it was a great airline. One of the first airlines to buy Boeing 707 aircraft in 1959 or 1960, whenever it was…It should be as big as United Airlines.”

(Yashwant Deshmukh & Sutanu Guru work with CVoter Foundation. This is an opinion piece and the views expressed are the authors' own. The Quint neither endorses nor is responsible for them.)