Two Years With Tata: Air India aspires to be a global airline with a desi dil

Air india Airbus A350-900

It’s been two eventful years for Air India (AI) since the Tata Group acquired it in a landmark deal on January 27, 2022.

The salt-to-hotels conglomerate has put in nearly $3 billion into the airline over the last two years.

The Tata group took over the management of Air India in a Rs 2,700-crore deal, and launched Vihaan.AI, a five-year project for the transformation of the airline, which it said needed a lot of work.

Air India has since consolidated its position, partly by design and partly thanks to changes in the industry, which has evolved into a duopoly with Indigo and Air India claiming over 80 percent of the market.

“Though we have a long way to go in fleet upgradation, improved consistency, closing remaining gaps, and strengthening fragile processes, the future is now more visible, more tangible and, I hope, more inspiring,” AI Chief Executive Officer and Managing Director Campbell Wilson said in a letter to employees on January 25.

“Despite – and no doubt somewhat because of – the progress we’ve made in two short years since privatisation, expectations are high, so we need to keep rising to meet them,” he said.

Campbell said that the airline aspires to be “…a global airline with an Indian heart.”

Moneycontrol takes a look at some of the highlights of the last two years.

Massive aircraft orders and the new A 350

The airline, in June 2023, firmed up an order for 250 Airbus aircraft and 220 Boeing jets worth $70 billion at list prices. The airline's new planes, including the brand-new Airbus A350-900, has brought optimism about a 'new Air India' in an industry battling multiple challenges.

Throughout 2024, the Air India group intends to induct one aircraft every six days on average, and 68 in total, Campbell said. The group will also use four leased Boeing 777 wide-body planes.

Over the past two years, the airline has augmented its legacy fleet by taking 36 aircraft on lease and bringing 90 percent of its long-grounded aircraft back into service.

As of now, the airline has 117 operational aircraft in its fleet, and its subsidiary Air India Express has 63. In July, Air India will also kick off the interior refit of 40 legacy, wide-body aircraft. The airline has committed around $400 million towards refitting its Boeing 777s and 787s.

Expanding network and rising revenues

Over the last two years, Air India has added five domestic and 11 international routes to its network, and opened five international stations.

Air India operates 47 non-stop flights per week, and over the northern winter 2023 schedule (October to March), will take delivery of more than 30 new aircraft and add more than 400 weekly flights.

According to aviation analytics firm Cirium's data, the airline runs approximately 2,900 weekly flights, with roughly 32 percent dedicated to international routes,

As per data shared by Wilson with AI employees, Air India has clocked 249 percent revenue growth over the past two years, while Air India Express’s revenue grew 148 percent over the period. The full-service carrier reported its highest daily revenue of Rs 115 crore in August 2023, marking a 26 percent year-on-year increase.

Penalties and customer experience

In the last 12 months, the Directorate General of Civil Aviation has fined Air India seven times for a total of Rs 2.5 crore, including the latest penalty of Rs 1.10 crore,  for air safety violations.

In 2023, the merged entity of Air India and Air India Express spent Rs 1.45 crore on the facilitation of/compensation for 1,372 passengers who were wrongfully denied boarding.

The airline spent Rs 65.86 lakhs on facilitating 5,096 passengers due to flight cancellations, and Rs 1.73 crore on facilitating 81,501 passengers due to delays of more than two hours, according to DGCA data.

Employee Issues

Since the takeover of Air India by the Tata group, the airline has faced several instances of employee unrest over issues such as the stoppage of retirement benefits like provident fund, pension, gratuity, and medical care.

The airline's new management has also faced protests over the eviction of employees from staff accommodation in Delhi and Mumbai, as well as pay cuts.

In April 2023, Air India pilots, who are a part of the Indian Commercial Pilots Association (ICPA) and Indian Pilots Guild (IPG), were at loggerheads with the airline about the new compensation package offered by the airline.