Interesting allegation of AI corruption
 

I ran into someone quite by chance who used to be the manager for a now-defunct private airline in one of the smaller towns in India. He alleged that AI is a conduit for government money to go into the hands of private airlines. One of the many tactics used was the following: a scheduled AI flight from X to Y would get canceled at the last minute due to "technical issues". Local maintenance people were obliged to certify that the aircraft was not air worthy until "repairs" were made even when nothing was wrong with it. The calls often came from Delhi, so they apparently had no choice. All the passengers booked on that AI flight were then rebooked on one or more flights by private airlines scheduled around that time. Not only did the passenger revenue now get diverted to the private airline(s), but all AI personnel involved in that flight (flight crew, ground staff, maintenance people, etc.) continued to get paid for a flight that never took off. His point was that if AI really wanted to be profitable, they could have been very profitable for years.

I have no reason to believe nor disbelieve this person, although I saw no incentive for him to make up such a story to a stranger waiting for a taxi. To those who're more familiar with the airline industry in India: any credence to this? What other allegations of corruption are you familiar with?

I can see some truth to this, but I doubt that this would have been able to carry on for long without being noticed. At least not long enough for it to be financially profitable to other airlines. What I do know is that a lot of foreign carriers were able to drastically expand in India after deregulation in the industry and that really made AI uncompetitive globally.

its possible & i can imagine this happening some times but this is hardly the reason ai is not profitable....there are far too many problems with the airline & the way it is run....