Ex-minister Praful Patel forced Air India to buy excess aircraft

If Air India's Maharaja is in the red today, one man - Praful Patel - is largely to blame for it.
On August 2, 2004, four months after he took over as civil aviation minister, Patel, now the minister for heavy industries, chaired a meeting that decided to inflate Air India's purchase order from the original proposal of 28 aircraft to 68 at a stupendous cost of Rs 50,000 crore.
Of the 50 aircraft on Patel's shopping list for Air India, 27 were Boeing 787 Dreamliners.
Worse, the inflated purchase order was not backed by either a viable revenue plan or expansion of routes. The erstwhile Indian Airlines too was asked to revisit its proposal to buy 43 aircraft but it refused.
The ministry, through a letter dated August 5, 2004, forwarded minutes of the meeting to then CMD Air India, V. Thulasidas. The letter written by an under-secretary in the ministry K. K. Padmanabhan said: "I am directed to forward herewith a copy of the minutes of the meeting taken by Shri Praful Patel, Minister of Civil Aviation on August 2, 2004, to discuss the proposal of Air India for acquisition of aircraft by Air India."
The minutes of the meeting tasked that the "Air India should revisit the proposal of aircraft and submit a fresh project proposal to the government at the earliest which could include the revised requirements." Thulasidas agreed to revise the proposal despite strong opposition from the ministry's additional secretary-cum-financial adviser V. Subramaniam.
Patel's controversial decision proved to be the proverbial millstone for the airline which is still straddled with a debt burden of more than Rs 40,000 crore and an estimated loss of around Rs 7,000 crore. Till the 2003-2004 fiscal, AI was making a profit of around Rs 105 crore.
08/05/11 Ajmer Singh/India Today

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Categories: Air India May 2011