The story of Air India is more than just airline news.
Air India, the ‘Maharaja’ of the skies, is the ultimate, high-stakes example of what happens when you forget to build systems that can work without you.
It’s a story of a spectacular rise built on a founder’s passion.
A devastating fall when those systems broke down.
And a massive, ongoing rebuild. This isn’t just about airline history. It’s a model to rethink how you run your business.
Let’s start from the beginning…
Let’s go back to 1932.
J.R.D. Tata, who loved flying planes, founded Tata Air Services.
It succeeded for one simple reason. J.R.D. was the system.
He’d walk the aisles, checking the cleanliness of the cutlery, the temperature of the food, and even the way wine was poured.
He cared a lot about doing things well and making customers happy. This hands-on leadership from the founder was what built the famous story.
It made Air India the “Palace in the Sky,” a global benchmark for luxury and service.
At this peak, the Air India owner was its founder, J.R.D. Tata and his system worked.
But then came 1953: nationalization. The government took over.
J.R.D. stayed on as Chairman, but the soul of the company was never the same again.
The entrepreneurial system, built on personal passion and total accountability, was about to be replaced by something very, very different.
This was the beginning of cracks appearing in the foundation of the organization.
So, what happens when a system built on one man’s passion gets replaced by a web of bureaucracy?
It doesn’t collapse overnight. It’s a slow rot.
First, passion was replaced by politics.
Accountability disappeared.
People no longer made decisions for the good of the customer or the business. They made them for personal or political convenience.
Imagine this. Someone who didn’t understand your customers, or worse, didn’t care, started making hiring or purchasing decisions.
That’s exactly what happened. This is what plagued Air India for decades.
Next, processes were replaced by people-dependency… in the worst way..
It wasn’t about what you knew (the process), but who you knew (the politics).
Want a promotion? Know someone in politics. Need a problem solved? Pull a few strings.
No one took responsibility.
This led to disastrous, commercially insane strategic decisions.
In 2007, the government forced a merger between Air India (international) and Indian Airlines (domestic).
These two companies had different cultures, fleets, and salary structures.
Think about merging your best-performing team with a long-time rival, without any plan to help them work together.
It was total CHAOS.
To make it worse, this happened soon after they borrowed heavily to buy 111 new planes. That sealed their financial fate.
The systems for smart decision-making weren’t just broken. They simply didn’t exist.
The collapse didn’t surprise anyone. It was bound to happen.
Here, I’m not talking about small, manageable losses.
Air India lost over ₹20 crore each day.
Read that again… ₹20 crore. A day.
If you calculate for a year, debt swelled to around ₹61,562 crore (This was on August 31, 2021)
But the money was only part of the story.
The real damage was to the brand. The trust. The legacy..
| Cost of Broken Systems | |
| Daily Loss | ₹20 crore/day |
| Total Debt (2021) | ₹61,562 crore |
| Brand Reputation | From “Palace in the Sky” to “Airline of Last Resort” |
| Customer Experience | Poor service, dirty planes, social media backlash |
| Employee Morale | Low motivation, poor culture |
Travellers flooded social media with pictures of damaged, unclean seats, broken entertainment systems, and dirty bathrooms.
The staff, once the world’s elite, were now seen as indifferent and unhelpful.
It was an empty shell staying afloat because taxpayers kept bailing it out.
The decline of Air India was a warning for all large organizations. The fall was complete.
| Air India’s collapse is a massive warning. For your business, this chaos might look like firefighting, constant people-dependency, and you being the only one with the answers. As a top business coach, I can tell you that systems are the only way to stop this chaos and scale. |
The airline seemed beyond saving.
The government tried to sell it many times but failed. They eventually changed the deal to make it easier for someone to buy.
This meant the government took on most of the massive, unpayable debt.
On January 27, 2022, the Maharaja finally came home. This marked the completion of the Air India acquisition by Tata.
The Tata Group reclaimed the airline that J.R.D. had founded 69 years earlier.
People finally had an answer to ‘Who is the owner of Air India?’. The Air India owner’s name was, once again, Tata.
But this wasn’t just about nostalgia or emotion.
The new Air India owner, the Tata Group, knew this.
The Tatas got a real mess. Demoralised and divided employees, old and inefficient planes, outdated computer systems, and a poor work culture.
So why buy it?
Because beneath the rot, there were priceless assets.
We’re talking about thousands of coveted landing and parking slots at the busiest airports in the world, including London Heathrow, New York JFK, and major hubs in the Gulf.
Tata’s plan was clear. Secure those priceless assets and trust that the broken systems can be repaired.
This is where things get really interesting for business owners like you.
How do you fix something that’s broken?
You can’t fix a house by just repainting it.
You have to rip out the bad pipes, rewire the whole house, and rebuild the foundation.
They are tackling every broken system at once.
First, fix the tools (The Fleet).
They’ve made history by placing a record-breaking order for 470 new planes from Airbus and Boeing.
At the same time, they committed $400 million to refurbish their existing aircraft. No more broken seats. No more glitchy screens.
Second, fix the tech (The ‘Operating System’).
They are investing $200 million in technology to start.
Why? To move from clunky 90s software to new, cloud-based systems for everything from bookings and cargo to maintenance and revenue.
Third, fix the workplace vibe (The People System).
This is the toughest and most crucial part.
They didn’t just give motivational speeches.
They changed how things work.
They introduced Maharaja, the airline’s gen AI virtual agent, eZ Booking, an AI-driven feature on the Air India website and Vihaan.AI, a new performance management system.
For the first time in decades, bonuses are tied directly to performance. If you perform well and the company thrives, you get rewarded.
Suddenly, people have a reason to care. There’s accountability now. They are retraining everyone, from the cabin crew to the ground staff.
Fourth, fix the structure (The Business System).
They are simplifying everything.
The old structure was a confusing mix of different brands.
They are merging Vistara (a Tata–Singapore Airlines JV) into Air India to create one big full-service airline.
This consolidation post the Air India acquisition is crucial. And they are combining AirAsia India with Air India Express to form a single, streamlined low-cost airline.
No more confusion, just clear, efficient, and focused systems.
This isn’t a quick fix. It’s a deep, multi-year, complete overhaul.
To make it simple for you…
There’s a story about a fast-food chain owner who visited his busiest store. The manager was running around, shouting orders, and trying to keep things under control.
The owner watched, then called him over. “You’re a great worker,” the owner said, “but a terrible manager. You’re in the system. I need you to build the system.”
Air India’s old managers were caught up in their system too. Now the Tatas are building a different one.
Be someone who BUILDS.
Air India’s epic story is a powerful reminder for every single business owner.
This ambitious rebuild following the Air India acquisition will be watched closely by the entire aviation world.
For your MSME, the lesson is clear: your success isn’t just in your idea..
It’s about setting up everyday, consistent, dependable processes that bring value even when you’re not around. The Maharaja’s future depends on it. So does yours.
Want more insights on business growth for MSMEs? Click here to read our other blogs!
As of 2022, the Tata Group is the full owner of Air India, after the successful Air India acquisition by Tata.
The Air India owner’s name is Tata Sons, via their holding company Talace Private Limited.
The Air India acquisition involved the Tata Group taking over 100% of the airline from the Indian government, including its massive assets like landing slots and a large fleet.
Air India merged with Vistara Airlines in November 2024
None can destroy iron, but its own rust can! Likewise, none can destroy a person, but their own mindset can.
Former chairperson of the Tata Group
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