The first major transformation in Air India will be visible either in July or August this year as the first Boeing 737 — of the total 470 brand new aircraft ordered by the airline — will touch down in India, said Campbell Wilson, CEO, Air India. Just a year into his new job, Wilson is ensuring that the once government-owned airline is transformed into a ‘mega’ privately-owned airline under the Tata Group.
“Air India is as much a start-up as it is in a transformation phase. As I have been quoted earlier, this journey is like a cricket test match, not a T20,” he told reporters of The Hindu Group during his visit to Chennai. Excerpts:
Can you talk about the transformation that’s happening at Air India?
I don’t think there’s another example in the history of four airlines — Air India, Air India Express, Vistara and Air Asia — merging into two concurrently. And, I don’t think there’s another example of a long-time government-owned airline being privatised and expanded at the rate that it is being expanded. In October last year, we rolled out the five-year, three-phase Vihaan.AI transformation programme to restore Air India to the upper echelons of global aviation.
The first phase, called Taxi, of six months, finished in March. The most publicised event was ordering 470 aircraft, which is the biggest order in the aviation history globally. A lot has been done, including modernising the infrastructure of reservation systems. The progress has set a good foundation for the subsequent transformation. The second phase, Takeoff, is to put in place processes, infrastructure and improving people skills.
When will the first new aircraft arrive?
The first new aircraft will land in July or August. The first wide body aircraft — A350 — will come in October or November, and the bulk of them will start from 2025. We have also leased a lot of aircraft from Delta and some from Etihad.
There are 25 A320s coming this year. We wanted to be able to use these aircraft to expand quickly to improve the onboard product and buy some time until we could start taking deliveries reserved for the 470 new aircraft. By the latter half of 2024, a significant majority of our domestic full-service aircraft will be essentially brand new.
If you layer in the Vistara aircraft, 75-80 per cent of the aircraft flying in full service will be brand new. That’s a rapid and significant transformation. On the wide body side, eleven 777s and six 350s comprise about a third of our wide-body fleet. About a third of the aircraft will be operating with a modern interior product by the end of this financial year.
Can we expect Air India to become a mega carrier or be in the top 10 globally in future?
At a global level, there are mega carriers in the US with 800 aircraft and Chinese carriers about the same. The likes of Singapore Airlines, Emirates or Qatar have around 200 to 250 aircraft. Air India will be in between the two. If you look at the structure of the Indian market and the opportunity, there is an upside growth. We have put a lot of work and taken bold steps to signify the seriousness in which we are approaching this.
I hope people get a sense that we are setting our sights high, both in terms of scale and in terms of quality. It’s not easy. It’s a competitive market. There’s a high bar that’s been set. But I’m quite convinced we will get there.
How many of the existing aircraft will be scrapped?
The nine Airbus 319s will retire in the next 12 months, and many will retire as leases expires. We are spending $400 million on aircraft interiors and in installing new seats and in-flight entertainment systems. The 747s won’t fly again; we are in the process of disposing them.
What will happen to the Jumbos?
We have put out an RFP for interested parties to bid. And, so those will be disposed of in whatever way, depending on who the successful bidder is.
How will the consolidated Air India look like?
A full-service carrier... probably by July or the September quarter next year. The consolidated full-service airline called Air India and the low-cost airline called India Express — the latter flying narrow-body aircraft domestically and short-haul international flights.
The full-service Air India will fly both narrow- and wide-body aircraft domestically, and international short haul and long-haul routes. At present, if you include Star Alliance in the mix, there are about 220-225 aircraft in the game; by the end of the next calendar year, it will be about 300, and will keep growing in both narrow-body and wide-body, and domestic and international.
Four airlines were operating in silos. How are their processes getting integrated?
Each is operated on a different reservation system. There are also four sets of operating manuals and operating procedures — over 160 manuals and 140 IT systems. Bringing the manuals into one is a very complex process. We are working with the DGCA and others to go through it in a very structured manner. This is a big task and governs how the airline airlines operate.
How about increasing the market share of the consolidated Air India?
Under Vihaan.AI, we want 30 per cent market share for domestic and about 30 per cent for international. In domestic, with the consolidation of the four airlines, we would presumably have about 25 per cent. So, there’s another five percentage points to grow on top at least. Doubling the share to 30 per cent is the objective for international as well.
But foreign carriers dominate the Indian sky in the international route. How will you break this?
I think part of the reason why people why choose to fly via other places is because there have not been enough non-stop options. And, if there was a non-stop option, maybe the quality was not the same; the price was not good enough or service not up to people’s expectations. And much of that is now in our ability to redress buying new aircraft, fitting in with new products, improving punctuality, improving catering and increasing services to various cities.
How do you plan to recruit a large number of crew and pilots?
We are now recruiting and training more than 550 cabin crew per month and inducting and training 50 pilots a month. A few hundred pilots are seeking to join us from other carriers simply because, I think under Tata, people see a solid future with 470 aircraft; good promotion and opportunities. We are just about to sign the lease on a new training academy in Gurugram. We are in discussions with partners on joint ventures for Airbus and Boeing training, and that will ultimately be one of the world’s largest training centres.
Will the iconic Maharaja brand return in a big way?
Travelling across the country, I heard one of the things that people wanted is to retain the Maharaja, which will have a future in the Air India brand. It’s an important icon and a link to the past.