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A year after taking over Air India, Tatas have more misses than hits to show

But the transition has just begun and all assessments must bear in mind that the Tatas took over an airline beset with problems. To expect a consistent product and service level on over 100 ageing aircraft almost overnight is asking for a lot.

January 27, 2023 / 08:14 AM IST
When the conglomerate took over last year, the general impression was that it wanted to take the airline back to the glory days under the legendary JRD Tata.

When the conglomerate took over last year, the general impression was that it wanted to take the airline back to the glory days under the legendary JRD Tata.

January 27 marks one year of Air India (AI) returning to the Tata fold. When the conglomerate took over last year, the general impression was that it wanted to take the airline back to the glory days under the legendary JRD Tata. At the time of winning the bid for Air India, N Chandrasekaran, Chairman, Tata Sons said, “We are excited to have Air India back in the Tata group and are committed to making this a world-class airline.”

However, the first anniversary celebrations are being held under a cloud. The first blow came soon after the takeover, when many feel Tata Sons committed the first self-goal — it appointed Ilker Ayci, a former Chairman of Turkish Airlines, as the CEO and MD of the airline on February 14 last year.

The appointment of Ayci, who is said to be close to Turkish President Recip Tayyip Erdogan, raised eyebrows given the political equations between India and Turkey.. Turkey has been supporting Pakistan at the Organisation of Islamic Cooperation, and referring to the human rights situation in Jammu and Kashmir, incurring the ire of the Indian government. RSS affiliate Swadeshi Jagaran Manch (SJM) said that it was confident the government would not give Ayci the sanction and suggested that the “national carrier” should be controlled by a person of Indian origin. After protests from various quarters in India, Ayci turned down the job a fortnight later.

Worse followed last November in what many are calling the ‘pee-gate’ scandal, after a flyer allegedly urinated over a co-flyer in the business class section of a New York-New Delhi flight. The controversy is still in the news.

In all fairness, the Tatas took over an airline beset with problems, making its revival a daunting task — the fleet is old, and not much refurbishment had been done while it was under government control. So, to expect a consistent product and service level on over 100 aircraft almost overnight was and is asking for a lot.

The group has made some beginnings though. It appointed Wilson Campbell, a veteran of the Singapore Airlines group with over 26 years’ experience, as Chief Executive Director and Managing Director in May last year. The airline went back to the drawing board and came up with a vision document, Vihaan.

Says Satyendra Pandey, Managing Partner, Aairavat Technology & Transport Ventures, “For outsiders looking in, three key themes form the basis of the revival plan: talent, technology and transition. This is further highlighted in the Vihaan plan where Air India highlights five pillars of its strategy: exceptional customer experience, robust operations, industry-best talent, industry leadership, and commercial efficiency and profitability.”

The airline is also said to be readying to order new aircraft — both narrow and widebody — and in the meantime has leased aircraft, apart from introducing a premium economy section on some of its international flights, to take on competition.

Modest improvement

The numbers that AI has achieved over the last year show things have begun to gradually improve. According to Mayur Patel, Head of Asia, OAG Aviation, a leading data platform for the global travel industry, the Air India Group’s (Air India, Vistara, AirAsia India and Air India Express) domestic capacity share — seat capacity based on available seats in the market — increased by 1.8 percentage points, from 22.7 percent to 24.5 percent, in January 2023, compared to a year earlier.

“In the same period, IndiGo increased its share by 5.5 percentage points whilst other majors SpiceJet and Go First decreased 3.4 and 6.3 percentage points respectively,” Patel says.

When it comes to international capacity for Indian carriers, the Air India Group has so far recorded a 28.6 percent share in January 2023, up 2.1 percentage points on the back of additional capacity deployed on European and North American flights, he adds.

Captain Gustav Baldauf, who was Air India’s Chief Operating Officer in 2011, adds that shortly after the takeover, the Tatas did some things right, like bringing new faces into the management team, and announcing some positive changes for the Indian aviation environment. By positive changes, Baldauf is referring to Air India improving its On Time Performance, targeting 30 percent market share, and talking about a better product for customers. “That willingness to start a better service quickly opens up the competition with the market leader (Indigo) on one side and sends a message to other airlines that are struggling. These inputs give a momentum to the aviation environment to do something, to recheck and change services, get better in different aspects,” Baldauf said, adding, “We will have to see if these points are strong enough to create a sustainable change for the customer.”

However, the jury is still out on whether this means that Air India is on the road to becoming the airline it was under JRD Tata.

Captain Baldauf also says that while he has seen some positive aspects there are a lot of problems lacking solutions. He adds that if the Tatas have a vision on how to handle their airline system, it was “high time to come out with it” with a strategy to act as one big player and tackle competitors.

“(There is) a lot of announcements, a lot of speculation in the media but I do not see real progress in that huge exercise,” he adds.

Nostalgia for the JRD days

Former employees who worked under JRD Tata are not impressed either. An employee who joined as a junior officer when JRD was at the helm and rose through the ranks to become an Executive Director, feels that JRD would have been deeply disappointed by the state of affairs in the Maharaja today.

“There are two words to best sum up the way Tata Sons have run the airline in the past one year: indifference and arrogance. They are treating it like any other of the various businesses they have,” says the former official, who declined to be named.

Captain Minoo Wadia, who was transferred on deputation from the Air Force in 1977 and flew when JRD was at the helm, also says the Air India of today is quite different. “It may never be the same. Today's focus is more on revenue and less on service,” he says, but adds that “this one year has been (about) transition, so not much change was expected.”

Aairavat’s Pandey adds, “The Air India turnaround effort remains one of the most challenging turnarounds — not only in India but in global aviation. The singlemost important factor will be getting the culture right. With four separate entities being amalgamated, each with a distinct culture, a legacy and a different perspective on the business, the flightpath ahead will be anything but smooth.”

“The carrier has not lived up to the great expectations of the public. Some employees seem to be still disgruntled perhaps due to cuts in salaries and benefits and the passengers are still complaining about unserviceable seats and defective inflight equipment on long-haul flights,” says another person who worked under JRD.

Others are dissatisfied with the work environment under the Tatas. A former Air India captain who flew under JRD, summed up the anger among employees, saying that “they have closed down the medical facilities for retired staff and sent us off to the Central Government Health Scheme and they still have not registered all employees in the new scheme.”

He adds that the Tatas have done nothing for passengers or the airline’s image and feels that “it is just a half-hearted affair to honour Mr JRD”.

Given this situation, the Tatas would be better off considering what JRD said about Air India. As Harish Bhat notes in his book Tata Stories, JRD once told the airline’s employees, “I want that the passengers who travel with us do not have occasion to complain. I want to establish that there is no airline which is better liked by passengers, that is safer and more punctual, where the food and service is better, and which sets a better image than Air India.”

Further, as Shashank Shah notes in his book The Tata Group: From Torchbearers to Trailblazers, JRD’s comments at the end of Air India’s first annual general meeting seem prophetic, “Unless the greatest attention continues to be paid to the high standards of training and discipline amongst flying and ground crews, the resulting deterioration might destroy the good name of Indian civil aviation.”

Ashwini Phadnis is a senior journalist based in New Delhi.
first published: Jan 27, 2023 08:14 am