The Hindu Business Line : `The key issue is to manage costs' — Mr V. Thulasidas, Chairman and Managing Director, Air India

How often does the Chief Executive of an airline walking around the aircraft to check on the well-being and comfort of the passengers? That is precisely what Mr V. Thulasidas, Chairman and Managing Director, Air India, did on the inaugural run of Air-India's flight on the Delhi-Amritsar-Birmingham-Toronto sector on the newly leased Boeing-777 aircraft.

The CMD not only walked around the aircraft collecting the business cards of the passengers, but also stood in the galley talking in fluent Bengali with the cabin crew on the problems they faced.Returning to his seat at the front of the aircraft, the CMD who has just about completed 16 months on the job, spoke to Business Line on a variety of issues connected with the airline.

Excerpts from the interview:

On the airline's plans

Air India immediately plans to offer direct connectivity from Delhi and Mumbai to cities in South-East Asia. We are looking at offering flights to Singapore, Kuala Lumpur, Bangkok and Hong Kong. We hope to have these flights in place by June or July this year. On some of these sectors we plan to offer flights four-to-five times a week.

Besides, the airline will soon be starting a direct flight from Mumbai to Mauritius. The airline is also looking at operating some terminator flights to Paris and more trans-Atlantic flights. London will mainly be for trans-Atlantic flights.

On aircraft to be used for new flights

We will be getting one more Boeing 777-300 ER aircraft and three Airbus A-310 aircraft soon. Besides, we recently got a Boeing 747-400 combi aircraft. However, after that we have not lined up any more aircraft for the airline as yet for this year.

The airline is keen to get five or six more aircraft for next winter. We are still in the market for these aircraft. But it is a problem of plain availability and not just the leasing rates that are being charged.

Plans for the low-cost airline Air India Express

The airline board recently took a decision that both AI Express and AI will fly domestically also. There will be both domestic flights and domestic legs of international flights. AI Express will offer lower fares. But we have not yet decided on the fares.

There are two types of passengers — those who expect low fares and are willing to travel in economy class and there are those who require more and are willing to pay more. We will be in a position to offer a combination of both. I see this as a natural progression of the airline.

Steps being taken to strengthen AI

The key issue is to manage costs. Getting aircraft and adding to the fleet is not that difficult. I have told the people in the airline that you leave what is required from the Government to me — that is my job. But you (the airline staff) need to become more productive; otherwise there could be no future for the airline.

However, this cannot be achieved overnight. It is for the airline staff to understand and accept as some may be affected by it. We are also trying to achieve more in cost management. We recently invited tenders from hotel chains for accommodation globally and hope this would be more cost-effective.

Similarly, in catering, we are trying to see how we can bring about reduction in cost without sacrificing on the quality of food. This can be achieved by tighter monitoring of the number of meals being uplifted.

AI does not want to position itself as a low-quality airline but wants to be known for its high quality. At the same time we need to be careful about the yield or revenue. I do not think the passengers will complain if they have to pay a bit extra if the product is good.

The airline is also planning to have a corporate management cadre that will have people from various disciplines within and outside the airline, including chartered accountants and professionals. The idea is to get the best from within the company and also keep recruiting new people so that there is fresh talent.

They will be the backbone of the company and be seen as the future of the airline. However, the work done by each and every employee will be important. The airline needs to capitalise on whatever strengths it has as an organisation.

Controversy regarding the airline's latest fleet acquisition plan

The thing to remember is that the final price has not been arrived at (for the 50 Boeing aircraft that the airline plans to purchase). The final price will be arrived at only after negotiations. The evaluations have been made by the Board based on the discounts offered by the manufacturers. However, there are several misleading reports being circulated by vested interests. Based on the technical evaluation if we had purchased either the Boeing or Airbus aircraft at the catalogue price, we would have made losses with both the aircraft type.

But no aircraft manufacturer sells, nor does any airline purchase, on the catalogue price of the aircraft.

We would have made a profit with either the Airbus of Boeing aircraft that AI plans to acquire with the price reduction being offered by the aircraft and engine manufacturers. However, there will be substantially more profit from the Boeing aircraft than there would be with the Airbus aircraft.

Passenger demand for the newly launched flight from Amritsar

There is great passenger demand for the Birmingham flight, even in the business class.

The inaugural flight was jam-packed and the flight is booked for the next two months. There is strong demand from the market to make the flight a daily one. (At present, the flight operates three times a week).

This is one route that we have to service. The airline is also looking at providing surface transportation to passengers travelling on this flight and wanting to go to Heathrow airport in London.

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