An Air India Insider’s Playbook For Tata
As narrated to BloombergQuint.
Air India is not as good an airline as it ought to have been, but it’s also not as bad as it is made out to be. The first thing to tackle is perception. You need to change the perception of the public which can be certainly done, now that ‘we are reviving the Air India magic with Tata’. Second, because Air India has been kept in this state for a very long period, the airline has not been investing in doing up the aircraft interiors, whether it is the seats or the upholstery, or the side panels.
Once these changes have come in, you’ve got to look at the machines and the men. With the people, the pilots are skilled, the aircraft engineers are well trained, but what the new owner needs to do is to re-engineer the airline’s work practices. Air India’s work practices are inefficient, unproductive, some of which have continued from when the airline was running in the monopoly era. Managements have been weak and the staff needs to be open to changes.
Find New Leadership Talent
While the work practices have to be re-engineered to make the operations efficient and productive, I do not fault the employees for the current state, because employees operate in the environment they are given, and there has been a lack of leadership at Air India.
Aptitude or competence hasn’t mattered when you rise in the hierarchy of this company. It is the length of service that mattered.
Air India has failed to produce leaders to lead their teams—whether it is engineering or ground staff, and everything else.
Once Air India is in private hands, you can inject talent from outside. Earlier, when people retired in quick succession and you were looking for people at the posts of the general manager or the executive director, it will be a man from within that is promoted. Now, that hiring can be looked at with a wider screen, and the new owners can say that they will get the talent from outside. In the marketing and commercial departments, executives need to be up to date on the latest philosophies that are needed to attract customers. What Air India’s management has to do is send out a letter to the first-class and business-class passengers, and corporate big names. A marketing professional will lead the process and say, this is what it needs to do, get Air India in a unique position where it can attract passengers who say, ‘I am flying Air India’.
Spend To Earn
By this point, the airline has got the people, got the machines, and got the management. The fourth is money. With cash being scarce at Air India for a long time, it has not been spending money. It has been cutting corners, on things like the food or the quality of wines served onboard flights. Now, Tata must see all these elements and say, I must get the best thing going. The owner must say ‘I am going to inject money so that we get money.’ When you inject funds, you produce quality services and then you do that people are willing to pay you. Compare that to what Air India has been doing, when competing with its aviation peers, it has attracted people to fly Air India purely on the basis of lucrative fares. If you were to visit MakeMyTrip or any of these travel portals, you will find Air India not being significantly higher than others, and fares are often even lower than IndiGo. Stand firm on this, say you are giving better amenities, better seats, and other facilities. In the airline industry, what matters is that the passenger gets comfortable seats. Air India does not have the density of seats that Indigo has.
That said, India is a highly price-sensitive market. For domestic travel largely, people are not willing to pay a lot for the services. Even Tatas' existing operations with Vistara are not making a profit. They will now need to upscale the whole operation, and the consolidated strength will help—Vistara holds about 8% odd in the domestic market, and Air India has 16%. Together, you get a pretty large number, a percentage that barring IndiGo nobody has in reach of Indian operations of domestic travel.
On international operations, Air India is leaps and bounds ahead of all carriers in India combined. None of these other Indian carriers fly to the U.S. or Europe. Only Vistara has started routes to London, Australia, and Japan. Air India has that international reach ready, all it needs is to get is the magic of professional management, work practices be re-engineered, putting money in to build the product, and making that money bring in more revenues.
Jitender Bhargava is former Executive Director of Air India and the author of ‘The Descent of Air India’.
The views expressed here are those of the author, and do not necessarily represent the views of BloombergQuint or its editorial team.