AI MD & CEO Campbell Wilsonan aviation veteran from Singapore Airlines, on Tuesday gave a ringside view of how brick-by-brick the Maharaja’s kingdom is being rebuilt in a three-phase process — taxiing, take off and climb — that will see the airline fleet triple from current about 120 over next five years and eventually move to all new planes.
AI is aiming for 30% market share in both domestic and international skies that will be achieved through a mix of growing organically (on its own) and inorganically (by possibly merging Vistara with AI and definitely AirAsia India with AI Express).
In the first “taxiing” phase, AI is tackling “all the things that tarnish or continue to tarnish the brand.”
The second “take off phase” will see accelerated investment in systems, processes, people and equipment, including aircraft, “that will be necessary to bring AI to the heights we aspire for it. By the end of year five (third phase) we hope to go from very good by then to ultimately world class,” Wilson said, adding, “All of us right from the board and through the organisation realise this is once in a lifetime opportunity to build an AI that represents India in a way that India deserves to be represented around the world. (To be sure) This is a not a T20 but a test match.”
In the immediate future by early next year, he hopes to resolve the issue of dirty-broken seats and dysfunctional inflight entertainment (IFE) on the airline’s existing wide body fleet that are deployed for medium (like Paris/Tokyo) to ultra long haul (like San Francisco/Vancouver) routes.
The Tatas took over AI and AI Express this January. Since then it has tackled issues plaguing the Maharaja during his state-owned decades by improving punctuality; making grounded planes airworthy again gradually; giving Covid time refund of nearly Rs 250 crore and improving onboard meals and website.
“We have spent a lot of effort over the past nine months to improve passenger onboard experience. The first is to restore many long-grounded aircraft (read make them airworthy again). Aircraft had been cannibalised to keep the fleet flying. The airline was short of funds and there was shortage of funds not just for seats and IFEs but to keep aircraft flying,” Wilson, 52, said.
AI 70 narrow body planes of which 54 are currently serviceable. The remaining 16 will progressively return to service by early 2023.
Similarly, AI’s widebody fleet currently stands at 43 aircraft, of which 33 are operational. The remaining aircraft will be progressively returned to service by early 2023.
Now he has turned his attention to the onboard product. The five ex-Delta Boeing 777 long range aircraft being leased will come in a new three class configuration — economy, premium economy and business — from next month to be deployed on US routes. The airline will is in talks to lease more wide body aircraft. The seats, carpets, cushions and IFEs of the existing wide body aircraft will be repaired by early next year.
“We are in discussions with suppliers for refurbishing interiors of the existing wide body aircraft. There is quite a bit of engineering work that needs to be done. It’s not a short process, but we are committed to doing that,” Wilson said.
Asked about integrating the four Tata airlines — Vistara, AirAsia India, AI and AI Express, — Wilson said AI will within itself have a full service and a low cost entity.
“We will deploy the best business model for the market being served. The domestic market is predominantly a low cost one although there are obviously some business routes that warrant a full service operation. International long haul is full service but the hinterland can a combination of both. It makes sense to consider and sell the network as a single network. People are quite fine with a low cost product for upto 3-4 hours. There is the prospect of coming in internationally on full service and connecting domestically low cost,” Wilson said.
AI is in talks to induct new aircraft with original equipment manufacturers like Boeing and Airbus. “Most countries, most airlines are searching opportunities for their aircraft. In AI, you have got opportunities searching for aircraft. That’s why we have leased five Boeing 777s and will lease more. There is significant opportunity.”
IndiGo will start deploying the single aisle Airbus A321 extra long range (XLR) on up to 7-hour routes. AI is keeping that option open as it is yet to order narrow body and may also go in for some long range versions of the same.
“When we place an order for narrow body aircraft, we have the option of taking many different variants of that including the long range ones. A long haul journey in a narrow body aircraft is not the same as a long haul journey in a wide body aircraft from passenger perspective. Fares are higher on full service carrier’s wide body. Per unit cost on a wide body is lower than narrow body. From both unit yield and cost, wide body (medium haul international) operation is superior if the market is large,” he said.
Will the premium economy product coming in on the five Boeing 777s become a permanent feature for AI wide bodies? “We will take the leanings from that on whether we make premium economy a permanent feature on the aircraft we are refurbishing and the ones we are procuring,” he said.
The group expects Air India to be profitable once passengers’ faith in its restored and premium class passengers flock to it.
“From 2014 to September 2022, Air India was never number one in punctuality (domestic flights). A lot of progress has been made and we are number one again in domestic punctuality.”
AI is among the few airlines that still overfly the Russian airspace, giving it the advantage of taking shortest routes between India and the west. US carriers, that do not overfly Russia, have curtailed their India operations or deferred launch of new routes. United has suspended its Delhi-San Francisco and Mumbai-Newark since Russia’s war on Ukraine. Delta has not resumed India flights after Covid. The US carriers’ proposed routes between Bengaluru and Seattle and San Francisco have been deferred. AI, therefore, has a unique advantage. Accepting that there are lot of opportunities, Wilson said: “Most countries, most airlines are searching opportunities for their aircraft. In AI, you have got opportunities searching for aircraft. That’s why we have leased five Boeing 777s and will lease more. There is significant opportunity.”
The existing fleet will, however, keep posing challenges. “We have found it difficult in some cases to get some components because the seat product is quite old and in some cases no longer in production. Then you throw in the supply chain constraints that every industry is facing, (the process) is slower than we would have hoped. But we are making progress. We are working with manufacturers to repair IFE systems of our wide body aircraft,. Hopefully we are a few weeks away from having the business class IFEs on all our wide body aircraft working. That may happen by the end of this month. Then all economy seats in way by early next year, January or so,” Wilson said.
The problems in the old fleet may keep recurring. “Challenge is that some seats are quite old. The design of many of these components is not as robust as today’s seats. So we can fix a seat today and in a month’s time, same problem may recur. That is building a supply of spares to keep repairing things that continue to break. We are also sourcing for ship sets of seats anywhere in the world that other airlines no longer need that we can procure and install on our planes. We are trying everything. Having largely resolved punctuality problem and refunds issue and improving food and website, this is the number one ting that customers are concerned about. IFE we are resolving,” he said.
There have been several instances of the Boeing 777 lavatories packing up in recent weeks. Asked about this, Wilson said: “There are many reasons why lavatories pack up. In many cases, and I hate to say so, it’s abut what people put down the lavs. There seems to be a spate more recently of people throwing in (small) cloth and thick paper towels. That system is not designed to be taking towels. It’s as much a case of education as it is about mechanical solution. Some of the newer aircraft are designed to cope with this kind of stuff better. But the B777 not the newest model of aircraft and not quite so tolerant.”
It will be five years down the line that these issues could finally be thing of the past when a new AI moves to a fleet of new planes with new systems in place. Just like Rome wasn’t built in a day, the Maharaja’s lost empire will take time to be rebuilt.