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As Tatas get back Air India, recalling how the government had snatched away their beloved child 70 years ago

The government handing over Air India to the Tata Group is a historic occasion — and much more than history coming full circle. Because for the Tatas, Air India was not merely a business — it was their dearest, most beloved child that was snatched away by the government.

Written by Girish Kuber | Mumbai |
Updated: January 28, 2022 7:28:33 am
JRD Tata, Chairman of Air India in 1962. (Express Archives)

The government is likely to formally hand over Air India to the Tata Group later on Thursday (January 27), nearly seven decades after it took the airline away from the company.

It is a historic occasion — and much more than history coming full circle. Because for the Tatas, Air India was not merely a business — it was their dearest, most beloved child that was snatched away by the villain; in this case, the sovereign Government of India.

Ironically, the Indian government was initially proud of the Tatas and the way they were running Air India. It was the only shining jewel that India had when the British left in 1947.

Having launched Air India in the 1930s, JRD Tata hoped free India would help Air India scale newer heights. But that was not to be.

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After Independence, Pan American and Trans World Airlines, along with KLM, Air France, etc., began flying to India. But it was on Air India that the diplomat Vijayalakshmi Pandit, Jawaharlal Nehru’s sister, flew to Moscow as independent India’s first Ambassador. She wrote glowingly of the standards of service offered on the airline.

JRD had proposed to the government that an international service be started under a sister concern, Air India International. To his pleasant surprise, the government agreed — and Air India International’s first flight to London took off in June 1948 with JRD himself on board.

Air India was gaining in popularity, and the government was keen to see it grow. So Rafi Ahmed Kidwai, the minister for communications, suggested a postal service connecting the four corners of India, with Nagpur in the centre of the country as the hub for overnight sorting.

It was a good idea in principle — but JRD pointed out that night landing facilities needed to be set up before Air India could look into the proposal.

The government disagreed — and it was adamant.

After the end of the war, the United States had offloaded many Dakota aircraft into the market, and industrialists of all stripes had jumped into aviation, with or without experience of running such a business. In India, where barely a few companies could survive, more than a dozen airline companies came up.

JRD called a meeting of Air India, Air Services of India, Airways (India), and Indian National Airways to jointly oppose the idea of an overnight postal service.

Kidwai, who was hell bent on starting the service, was extremely upset. Seeing the four competitors come together to oppose him, the minister concluded that JRD was trying to build a union against the government’s policies.

He went ahead and launched a new service called Himalayan Aviation in 1948. He announced it would be a highly profitable venture, in what he thought was a snub to Air India. In response, JRD wrote an open letter to the minister, demolishing his claims about profits.

A furious Kidwai was determined to teach JRD a lesson. He spoke in Parliament, labelling the companies as bloodsucking entities bent on making profits, and who did not care about public service. He targeted JRD personally, saying that all companies except Air India were willing to support the government’s postal initiative, and that Air India was the only company that was not willing to reduce passenger fares.

Seeing things going out of hand, Prime Minister Nehru stepped in and publicly declared that the Tatas were doing a fine job, and that Air India had been praised widely for its efficient and friendly service.

To defuse the situation, Nehru suggested setting up a committee to look into JRD’s proposal. The committee, under then Chief Justice of Bombay High Court G S Rajadhyaksha, reprimanded the government for having issued licences without thinking of economic feasibility.

“Where four companies cannot survive, indiscriminately issuing licences to a dozen more is arbitrary,” it said. JRD’s stand was vindicated, but the government was antagonised.

Soon began a clamour for Air India’s nationalisation.

In an interview to The Associated Press, JRD said nationalisation of any sector was not good for the country — it would lead to politicisation, which would be disastrous.

Bureaucrats working for nationalised companies reported to the concerned ministry, and could never take independent decisions, he argued. He sent a copy of the interview to Nehru, hoping that the Prime Minister would have second thoughts. But Nehru did nothing.

Soon, as JRD had feared, two companies, Ambica Airlines and Jupiter Airways, declared bankruptcy. Finally, the day arrived in 1952 when all the aviation companies were to be merged into one and run by the government.

As a last ditch attempt, JRD suggested forming two companies: one for the domestic sector, the other for international operations. He worried that all companies would be measured by the same yardstick, and he did not want Indian aviation’s reputation to be ruined outside the country.

But Nehru and his government did not want to listen.

JRD appealed to the government to appoint an independent committee to compensate the companies which were being merged. That too was rejected.

JRD was deeply disturbed. But it wasn’t over yet.

At a meeting with the minister for communications, Jagjivan Ram, JRD asked: “Do you think it is easy to run an airline just the way you run other departments? You will see for yourself.”

Jagjivam Ram replied coolly: “It may be a government department, but we want your help to run it.” This was rubbing salt into JRD’s wounds — to first gobble up his enterprise, and then ask him to run it.

The meeting ended inconclusively.

Nehru tried to pacify JRD. The Prime Minister wrote to JRD suggesting that he was mistaken in thinking that the government had treated him shabbily. He wrote:

“I was very sorry to notice your distress of mind when you came to lunch with me the other day. You told me that you felt strongly that you or the Tatas, or at any rate your air companies, had been treated shabbily by the Government of India. Indeed you appeared to think that all this was part of set policy, pursued through years, just to do injury to your services in order to bring them to such a pass that the government could acquire them cheaply.

“You were in such evident distress at the time that I did not think it proper to discuss this matter with you. Nor indeed am I writing to you today with any intention to carry on an argument. But I feel I must write to you and try, in so far as I can, to remove an impression from your mind which I think is totally wrong, and is unjust to the government, to me as well as to you.”

JRD replied in detail. He advised the government on how they should deal with industries and businessmen.

He said, “All my efforts are to produce a world-class airline in independent India. I just wish the shareholders and the employees do not get a raw deal in the decisions taken by the government.”

But unfortunately, nothing of what JRD had suggested was implemented.

All that was being discussed was the compensation to the airline owners. JRD was least interested in those discussions and negotiations.

He felt bad that his close friend Jawaharlal Nehru had been at the helm of affairs. JRD had no option but to hand over his child, his favourite business, to the government.

For JRD, the wound inflicted by Nehru would never heal.

Soon began Air India’s slide. The rest, as they say, is history.

***

Girish Kuber is Editor of Loksatta, and the author of The Tatas: How a Family Built a Business and a Nation (HarperCollins India, 2019) This is a revised version of the author’s article that appeared earlier in The Indian Express under the headline ‘Tatas and their baby: Group gets back what was snatched six decades ago‘.

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