Tata’s Strategies to Revitalize the Sluggish and Burdened Air India

Since taking control of Air India from the government in January last year, the Tata Group has implemented several strategies to revitalize the struggling airline. These initiatives include placing an enormous order for 470 aircraft and expanding their international operations. The Tata Group currently oversees four airlines: Air India, Air India Express, AIX Connect, and Vistara, a joint venture with Singapore Airlines. Additionally, they are in the process of merging Air India Express and AIX Connect with Air India, as well as integrating Vistara into the network.

Previously burdened with substantial losses and debt, Air India has embarked on a comprehensive transformation journey with the objective of becoming a “world-class global airline with an Indian heart.” The company is focusing on expanding its fleet and network, enhancing the customer experience, and bolstering operational reliability.

Campbell Wilson, the CEO of Air India, likened the airline’s revival to a Test match rather than a quick T20 game. Here are some of the measures that have been implemented as part of Air India’s revitalization efforts.

Vihaan.AI

Last year, Air India embarked on a transformative journey with the launch of Vihaan.AI, a comprehensive five-year roadmap symbolizing the dawn of a new era. Vihaan.AI encompasses a detailed plan for Air India, outlining key milestones to significantly expand its network and fleet, revamp the customer experience, and enhance reliability and punctuality.

Vihaan.AI was developed based on extensive input from Air India employees, who shared their aspirations and visions for the airline’s growth. The roadmap centers around five fundamental pillars: delivering exceptional customer experiences, ensuring robust operations, cultivating top-notch talent, attaining industry leadership, and optimizing commercial efficiency and profitability. While the immediate focus remains on addressing fundamental issues and preparing for growth during the Taxiing Phase, the medium-to-long-term objective is to strive for excellence and establish global industry leadership during the Take Off and Climb phases.

Air India recently completed the initial phase of Vihaan.AI, known as Taxiing. The primary aim of this phase is to address the airline’s legacy challenges on a large scale and establish a solid foundation for future growth. With the conclusion of the first phase, the Take Off phase begins, which will primarily focus on developing platforms, processes, and systems necessary for achieving excellence in all aspects.

Staff

Air India is actively seeking to recruit more than 4,200 cabin crew members and 900 pilots in 2023 as part of its expansion plans for both domestic and international operations. With a current fleet of 113 aircraft, Air India employs approximately 1,600 pilots. However, due to crew shortages, the airline has experienced cancellations and delays on ultra-long-haul flights.

In May, CEO Campbell Wilson announced that the airline is hiring 550 cabin crew members and 50 pilots each month. Furthermore, Air India aims to incorporate six wide-body A350 planes into its fleet by the end of this year.

Over the past eighteen months, nearly 30% of Air India’s workforce, which totals around 15,000 employees, consists of new hires. Until May 2023, the airline had recruited over 5,000 new employees, including approximately 500 pilots and 3,200 cabin crew members. Presently, Air India is actively recruiting non-flying personnel for various departments such as operations, HR, finance, and ground handling.

Tata Code of Conduct

Air India has introduced a revamped organizational structure for its non-flying staff, featuring simplified designations, work levels, and roles that are both competitive in the market and focused on productivity. In a move to enhance discipline within the company, the new structure also emphasizes the consequences for non-compliance with company rules and the esteemed Tata Code of Conduct, according to Suresh Tripathi, the Chief Human Resources Officer (CHRO), in a recent interview with ET. To ensure alignment with industry standards, Air India enlisted the expertise of external consultants to assess job processes and roles.

Furthermore, Air India unveiled a new learning hub for its employees called Gurukul.AI in May. Vihaan.AI and the airline have developed Gurukul.AI, a five-year transformation program aimed at offering personalized upskilling pathways for each employee. By evaluating their job roles, current competencies, and proficiencies, the platform generates customized learning paths. It incorporates competency frameworks tailored to different roles within the organization and grants accessibility to relevant learning modules, as stated in the company’s announcement.

In a series of stages, Air India is preparing to introduce Gurukul.AI, incorporating cutting-edge technologies and tailoring the system to meet the specific needs of various departments, including Inflight Services, Ground Services, and Engineering. Additionally, future phases of the platform will provide advanced, AI-powered solutions for managing pilot training.

By implementing Gurukul.AI, Air India aims to deliver an improved and personalized learning journey for its workforce, as it strives to adopt a highly proficient approach in order to establish itself as a globally competitive organization.

Operations

The Tata Group is currently implementing a restructuring plan to avoid competition among its four owned airlines by reorganizing their route networks. Air India made an announcement in February stating that Air Asia India would now serve three airports – Bhubaneswar, Bagdogra, and Surat. This strategic move aims to optimize the network after the complete subsidization of Air Asia India in November 2022. Furthermore, Air India plans to enhance its connections from Delhi and/or Mumbai to Cochin, Trivandrum, Visakhapatnam, and Nagpur. The goal is to establish seamless domestic-international connectivity with long-haul international flights operating from the two major cities.

The main objective of this approach is to concentrate the full-service airline on metro-metro markets and high-connectivity routes, while the low-cost airline focuses on leisure-oriented or price-sensitive markets. By doing so, Air India aims to enhance its appeal to both corporate and leisure travelers, as well as improve connectivity between key domestic cities and its rapidly expanding international network, as stated by CEO Wilson.

Request to Civil Aviation Regulator DGCA

Air India has requested the civil aviation regulator DGCA for a waiver on merger laws regarding Air India Express and AirAsia India. The objective is to obtain approval for the cross-utilization of pilots and cabin crew and the ability to sell tickets under a single brand before the NCLT officially sanctions the merger process. Such approval would accelerate the commercial synergy between the two airlines, enabling seamless route planning, joint advertising, and ticket sales as a unified entity. According to the company’s official statement, the company expects the move to yield operational cost savings by leveraging Sabre’s consultancy expertise to determine the most optimal routes for both the existing and new fleets.

Air India’s collaboration with Sabre involves an extensive market evaluation, the development of new hub and schedule structural designs, and meticulous planning of route networks and capacity for the next decade. Additionally, it encompasses the optimization of fleet assignment across the entire system, as reported by the company.

In December of last year, Air India joined forces with Microsoft to enhance productivity and achieve cost savings. According to a statement by the airline, this collaboration involves the adoption of Microsoft 365 tools and security solutions, which will provide productivity and security benefits to Air India employees throughout the organization. By implementing Microsoft technologies on an enterprise scale, every airline employee will have the ability to instantly connect, communicate, and collaborate with colleagues from around the globe, ensuring a secure and efficient work environment.

Customer experience

Air India has recently introduced updated menus for food and beverages on all its international flights departing from India, as part of its ongoing efforts to enhance the customer experience.

Based on feedback from guests, we have implemented these menu changes to provide travelers with a diverse selection of gourmet meals, trendy appetizers, and indulgent desserts. Our aim is to highlight the culinary influences of locally sourced Indian cuisine while ensuring a satisfying dining experience.
Air India has expanded its bar menu to include a diverse selection of premium spirits and a meticulously curated wine list showcasing exquisite French and Italian wines.

In addition to revamping its menus, Air India has undertaken a technology upgrade, which includes a redesign of its website, now accessible at www.airindia.com. This upgrade not only encompasses improvements in technology but also involves a change in the website’s URL from “.in” to “.com”.

An airline’s website plays a crucial role in effectively serving its customer base and increasing direct-channel revenues. Air India emphasized that the design upgrade will facilitate the swift implementation of new customer-friendly features that were not feasible with the outdated technologies employed previously. By implementing upgrades in experience management, digital marketing, analytics, and personalization technology, Air India anticipates a significant enhancement in the overall customer experience on its website.

NPS-based Customer Feedback

According to CEO Wilson’s statement in June, Air India has been actively distributing questionnaires to its customers on a daily basis and has been delighted with the positive feedback received through its digitalized customer feedback system. The airline shared that its NPS-based customer feedback mechanism has garnered an impressive 140,000 responses within a span of three months.

During this period, Air India has made significant strides in enhancing the NPS coverage, now encompassing the entirety of the physical customer journey. This includes various stages such as check-in, lounges, in-flight experiences, and the arrival process. Moreover, the airline has plans to extend this feedback mechanism to include online interactions and experiences with their call center.

Last month, Air India solidified its order for a total of 250 Airbus aircraft and 220 new Boeing jets, amounting to an estimated value of $70 billion at list prices. The comprehensive order includes a selection of 70 widebody planes, which comprises 34 A350-1000s and six A350-900s from Airbus, along with 20 787 Dreamliners and 10 777Xs from Boeing. Additionally, the order encompasses 140 Airbus A320neo, 70 Airbus A321neo, and 190 Boeing 737 MAX narrowbody aircraft.

To further expand its fleet, the airline has also entered into options agreements with Boeing for the potential acquisition of 70 additional planes. This includes 50 737 MAXs and 20 787 Dreamliners. The deliveries of the new aircraft will commence with the Airbus A350 leading the way later this year, and the majority of the order is scheduled to arrive starting in mid-2025.

Fleet

In line with its fleet and network expansion plans, Air India has already begun receiving 11 leased B777 and 25 A320 aircraft. This strategic move aims to expedite the airline’s growth by incorporating advanced and fuel-efficient aircraft across its entire route network within the next five years, as CEO Wilson affirmed.

Presently, Air India possesses a fleet of 122 aircraft and is actively engaged in its expansion. The airline anticipates acquiring six A350 and eight B777 planes by the conclusion of this year. Up until now, the carrier has secured leases for nine B777 aircraft. According to Air India’s CEO, Wilson, the true transformation will commence the following year, when the airline will receive all the leased planes, initiate the refurbishment of older aircraft, and begin receiving deliveries from its order for 470 planes.

Furthermore, Air India has pledged over $400 million towards the enhancement of the interiors of all its widebody aircraft, encompassing the installation of new seats and entertainment systems.

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