Air India turnaround: Why patience is running out

Consequently, recent numbers say that the airline has seen a rise in losses despite doubling in revenue. As per data submitted to the regulator DGCA, the airline registered a sharp increase in operating revenue – from ₹17000-odd crore to ₹31,377 crore in the year. But with operating expenses outstripping revenue, the airline remained in loss. In its first full fiscal year under Tata ownership, FY23, the airline reported a loss of ₹11,381 crore, up 18.6% from the previous fiscal year, FY22, which had a loss of ₹9,591 crore after accounting for write-offs and exceptional items.

While the high and growing expenses or extravagance as many refer to, it remains a cause for concern, there are some greenshoots visible for consolation. The airline improved its aircraft hours flown dramatically: up from 2,382 hours flown per aircraft in 2021-22 to 3,661 per aircraft in 2022-23. In 2021-21, under government leadership, the airline had reported a ten year low of 1,397 hours flown per aircraft! With a fleet size of 118 and total employees by end of FY23 at 14,205, the aircraft-employee ratio of the airline was 120. An improvement can also be seen in the airline’s passenger load factors in 2022-23, third highest for domestic after SpiceJet and IndiGo and second highest for international loads after SpiceJet. The loads carried by the airline on international flights are marginally higher than IndiGo, a feather in the airline’s cap by any yardstick.

The service element : the long and short of it

What remains the biggest concern is that the flow of complaints against Air India’s short haul or domestic offering and in several cases, the long haul flights has failed to abate (see visuals on complaints and emails). While occasionally and anecdotally, some positive feedback does come in – unlike earlier where it was almost always only complaints – the overwhelming majority still find the service and various aspects of the flying experience very underwhelming.

On domestic flights,  many complaints come in on the airline’s boarding procedures and process across airports. “It often feels like there is no system in place and the boarding procedures reflect the whims of the officer on duty on that particular day and time”, says a former joint secretary of MOCA. His experience is echoed by many frequent fliers who say that the boarding and passenger handling especially in situations of delay leaves a lot to be desired.

Any criticism of the airline’s offerings are quickly blamed by the management on “old, poor quality aircraft” and while this may be partly true, it doesn’t explain why the aircraft are often found unclean or why there is no semblance in the airline’s boarding procedures. “There is no clear leadership of the airport ground services vertical”, says a senior airline source and this he says explains why the chaos prevails.

Overall, senior commanders and insiders say that the focus of the new management is excessively on introducing “more and more apps” instead of the core operations : scheduling, rostering and improving the on board offering. “It almost feels like these aspects have been given up on as lost causes till the new airplanes come in”, says a senior commander.

“Air India’s on time performance and its handling of the crisis at various airports in the last fog hit winter season is another pointer that the new management is yet to find its feet or prove its mettle ”, argues a former CMD of the airline. He says that in times of crisis the actual operations and functioning of any airline is tested and this did not augur well for Air India in the November-December fog hit situation, revealing inherent weaknesses in the running of the airline. When the going gets tough, the tough seem to have failed to get going, he adds, in a lighter vein. He adds that the extent of how much things spin out of control is usually a reliable indicator of how far the management is in control.

A second problem, he highlights, is the tendency of the top management to manage almost everything from the “confines of their glass and chrome cabins in the head office” and almost never step into the battlefield to see how the troops are performing. “Air India has always had this affliction where the boss almost never drops in at the airport or city office to see how things are progressing on the ground. This has been a problem that has dogged almost all the airlines including the market leader IndiGo, more so once it reached its monopoly position on domestic routes : the creamy layer tends to lose sight of the ground reality.

As The Noose Tightens

Although anecdotally some improvements have been reported in the on board experience – especially on long haul flights with leased airplanes, Air India’s service offering has registered no discernible change in many parameters passengers judge airlines by.

As a result, many are skeptical of the ability of the present management team led by Campbell to pull off the entire exercise. Top management insiders say that while Campbell might have the best intention, he lacks the requisite experience to pull off something of this magnitude and scale.

A top management source makes three main points. One, he argues that Campbell himself has primarily been in charge of a subsidiary of a bigger mothership in a cultural environment where authority is easy to enforce. He says that the magnitude, complexity and environment here in India would be a challenge even for someone who had dealt with complex mergers in the past, let alone someone who has never had this kind of experience. “From a structured thinking and environment where your calendar is fixed six months in the future to be air dropped into the chaos of the Indian aviation working environment, the transition itself is not easy”, he points out.

Two, he feels the rope available from the shareholders – Tata Sons – is also shrinking now unlike a year ago. “The shareholders have displayed immense patience and unless they see some delivery on either the operations front or the bottomline, justifying this kind of spending might prove hard for the turnaround team”, he argues. In particular, complaints of basic cleanliness of aircraft or the quality of food are “inexcusable”. He feels there is already a fraying of the patience levels emanating from the top and the constant barrage of complaints received by all quarters don’t help matters. He further adds that he would not be surprised if the present team led by Campbell Wilson is not the one to deliver the “final goods” for the group, a sentiment echoed by many observing the developments. A Tata Sons spokesperson declined to comment on a detailed questionnaire on the turnaround of the airline including queries on challenges at a group level.

From a passenger point of view,  Tata’s failure to present a viable and much anticipated alternative to IndiGo on domestic routes and to foreign carriers like Emirates, SIA and others on foreign ones remains a matter of great dismay and regret. With the market leader IndiGo rapidly gaining a reputation as a big bully, taking fliers for granted, passengers looking to jump ship are growing on a daily basis. The sooner Air India gets its act together, the better it will be for all concerned including perhaps its biggest rival. As the saying goes, winning isn’t getting ahead of others, it is getting ahead of yourself.