I was deeply saddened to learn that Ajit Singh passed away a few days ago.  Saddened not only because the passing of a former colleague leaves a big void in one’s life, but also the fact that my association with Ajit went back beyond my Air-India days.

If memory serves me right, when I first met him, Ajit was working for Indian National Airways in their office at Maholtra Building in Connaught Circus, New Delhi.  I was introduced to him by my brother-in-law, O.P. Lumba, who was then working for Bharat Airways. This was before the many domestic airlines were nationalized and combined into Indian Airlines.  So, I am talking about the early 1950s.

I had at that time, finished my schooling, but had not yet graduated from college. By the time I joined Air-India in 1957, Ajit had moved to KLM.  I was delighted when Ajit joined Air-India and we became close colleagues.  Even after I left Air-India and moved to the USA, we met whenever I visited India and particularly, when he got involved with organizing the annual AI retired executives lunch.  Many a time, we had dinner the night before at his residence, where I met other colleagues who were staying with him on that occasion.

Ajit was a great socialite.  He formed a number of small groups comprising persons with whom he had worked and he made it a point to invite me to their gatherings whenever my visits to India coincided with their meetings.  Two such groups readily come to mind.  The first was his former Indian Airlines colleagues and it was a true pleasure for me to renew my acquaintance with some of them.  The second was a mix of travel industry personalities, such as Gautam Khanna and Dilip Mitra.

The world will  become smaller with Ajit's leaving it.  He is the second of four AI colleagues whom I knew prior to my joining the airline, who has left this world; the first being SK (Gulu) Gulati.  

In my Post of September 4, 2016, I had spoken of the “elevation” of the current CMD of Air-India to the grade of a full Secretary to the Government of India.  I quote below an extract from this Post:

“Air India chairman and managing director Ashwani Lohani has been empanelled to hold secretary-level posts in the central government.  - See more at: http://www.governancenow.com/news/psu/air-india-chief-ashwani-lohani-empanelled-as-secretary#sthash.nyxVKZmS.dpuf”,

In the same Post, I spoke of the new routes that AI had embarked upon, which in the opinion of some (I quoted extracts from the media) and myself, it would appear that orders came from “above” and immediate action was taken to introduce these two routes.  I went on to ask “Is this an autonomous Corporation or an arm of the Government?  From what is stated in the foregoing paragraphs, I guess the latter.”

I added that in my view, sycophancy continues to live and flourish in the Modi Raj just as it did in the Gandhi Dynasty Raj and that the CMD’s elevation in grade must have been a “reward” to Mr. Lohani for accomplishing the objectives of the P.M? 

I was, therefore delighted to read the CMD’s interview with Anirban Chowdhury and Satish John (Economic Times - Jan 7, 2016) in which he came out strongly in favor of outright purchase of aircraft as opposed to leasing.  Here is what he had to say (in Italics):

“What we also, however, did was we got into sale and leaseback deals (which didn’t work well). Interest or finance costs on debt (when aircraft is purchased) come below the line of operational expenses. But lease rentals accrue as operating expenses. That is what has impacted our operating profits for the first two quarters. 

We, however, hope to post an operating profit for this year too as September to March is a much better half of the year.” 

Are you saying the sale and leaseback model hasn’t worked for Air India? The entire industry swears by it. 

“Leasing of planes is a very costly proposition. It has the advantage of not having to pay upfront. But the amount which a company pays regularly (as lease rentals) is much higher than what it would have to pay had it purchased the aircraft by taking a loan. 

The premium on selling planes to lessers is not much, just a couple of million dollars. The lease cost of one Boeing Dreamliner 787 plane is $1 million a month. For a year for 21 Dreamliners, it’s Rs 1,800 crore. If I had purchased, my outgo in terms of interest costs on loans would have been Rs 1,000 crore. 

Going forward, I would definitely do outright purchase of planes.

What we also, however, did was we got into sale and leaseback deals (which didn’t work well). Interest or finance costs on debt (when aircraft is purchased) come below the line of operational expenses. But lease rentals accrue as operating expenses. That is what has impacted our operating profits for the first two quarters.” 

There are talks that Air India is looking to buy back the same Dreamliner planes that it did sale and leaseback deals on? 

“We would definitely like to do that as it reduces the servicing cost to half or even 60% -- it's still being debated.” 

The foregoing question and answer session gave me hope that finally, this Management is developing a backbone and that it will take decisions independently and not accept diktats from the Ministry or the PMO.

Guess what, not even 10 days later (see the Times of India article by Saurab Sinhal on Jan 16, 2017) where the Aviation Secretary is quoted as saying:

“NEW DELHI: The government has decided that Air India will almost double its fleet by adding over 100 aircraft, but without burdening the exchequer with a mammoth debt burden like last time. The airline will grow by leasing aircraft instead of purchasing them — the model adopted by Congress-led UPA.

"AI will induct 100 more aircraft in next four years. We have decided not to seek any additional budgetary support except for the turnaround plan approved for the airline earlier. The airline will lease aircraft and has the resources to make the payment that needs to be made for leasing," aviation secretary R N Choubey told TOI.” 

Please mark the words “The government has decided …….. The airline will lease”.

Sad, very sad, that the CEO of the airline makes a case for outright purchase of aircraft and less than 10 days later, the top civil servant in the parent Ministry rules otherwise.  What happened to restoring the Glory of Air-India?  Does any one even understand the meaning of this phrase????????