You're right, Sean; nationalisation was indeed in 1953.

However Air-India managed to function pretty well in the 50s and 60s as the government stayed out of the way and allowed JRD Tata, AI's legendary founder, a pretty free hand for most of that time. The decline really began in the 1970s though due to a confluence of factors, amongst which:

1. Increasing pressure of government-owned entities to function more as job factories than as commercial enterprises due to Indira Gandhi's strong tilt left in the early 1970s (bank nationalisation, war on poverty etc (this was way before Live 8!))

2. The removal of JRD Tata as chairman in 1978 (by Morarji Desai, Indira's successor); JRD's strong positive influence had been waning in the 1970s in any case due to (1) above

3. Continual decline even after JRD was re-appointed Chairman in 1980, by which time his role was more ceremonial and had very little executive power.

By the mid-late 1970s, Air India had become a caricature of its former self.