Air India made a record Rs 1-cr profit a day during Deveshwar's tenure

Air India made one crore profit a day under Y C Deveshwar's chairpersonship in fiscal 1993 making it the sixth most profitable airline in the world that year.

Deveshwar, who is stepping down as executive chairperson of ITC from next February, held the post of Air India chairperson during 1991-94. He was appointed by  then civil aviation minister Madhavrao Scindia and succeeded Subhash Gupte who held officiating charge at that time.

Deveshwar's tenure in Air India was marked by improved profits and good management practices. He framed policies on succession planning and tried to bring focus on increasing corporate sales, say retired airline executives.

While Air India had been a profitable airline during the 1980s,  its net profit doubled to Rs 333 crore in 1992-93 over the previous year. The following year also the airline clock a profit of Rs 201 crore, according to a parliamentary standing committee report on transport & tourism of 1999.  “ He announced  Air India was making one crore profit a day during the airline's golden jubilee celebrations,” recalls Jitender Bhargava, airline's former executive director.

The Rs 333 crore profit achieved in 1992-93  remains the highest ever achieved by the airline.  In dollar terms Air India's profit ( $ 100 million) was the sixth best amongst all global airlines that year, according to the airline's annual report of 1992-93.

The profit was achieved despite two adverse factors.  Inbound tourist arrivals fell 10 per cent between December 1992-March 1993 following the demolition of Babri Masjid. Also two month long flight engineer association strike had  impacted flights.

Deveshwar was in charge of the airline in the pre merger era (Air India merged with Indian Airlines in 2007).  In that year it had a fleet of 23 aircraft including a wet leased Russian  IL-62 aircraft (flown to Moscow) and operated to 40 destinations. It had an employee strength of over 17,000 employees in March 1993. At present Air India has 118 aircraft and serves 86 destinations in India and abroad and  its staff count including its engineering and ground handling subsidiaries is 19,000.

The profit achievement in the early 1990s is in sharp contrast to the  airline's current state of affairs and the airline is expected to post a loss of Rs 2600 crore for FY 16 which is still an improvement over a previous year's loss of Rs 5859 crore.

 Deveshwar tenure  saw induction of Boeing 747-400 aircraft in the fleet, (then the biggest passenger jet liner) and  saw a focus on growing sales and increasing efficiency. Deveshwar had also drawn up a vision of fleet replacement for the airline and had submitted to government a long term fleet renewal plan of  the airline, says S Venkat, retired finance director of Air India, who was executive assistant to Deveshwar.

“He  was one of the best managing directors to serve Air India. He ensured that all departments were working towards a single goal of improving productivity and profitability and brought in three elements responsible for commercial success – frequent flyer programme, automated revenue management system and a hub and spoke model in partnership with Indian Airlines,” recalls Michael Mascarenhas airline's former managing director.

“Mr Deveshwar lacked core airline business experience but was conversant with the hospitality business as ITC ran a successful chain of luxury hotels. He was conscious of passenger's needs and what was required to be done to stem the rot that had set in. He brought a host of good management practices...For instance he  instituted the practice of succession planning within the airline. He would track positions and make sure that six months before a position fell vacant a person was identified and trained to occupy it...Aptitude mattered and so did attitude. This was a major departure from the past,” airline's former executive director Jitender Bhargava writes in his book 'The Descent of Air India.”


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