Air India eyes profitability with fleet overhaul and customer satisfaction boost

Mint

2 days ago

Tata group-owned Air India has made profitability its prime focus and aims to achieve it in the next few years, as the full-service carrier undergoes a revamp to boost efficiency and passenger convenience.
In an interview with Mint, Air India chief executive officer (CEO) Campbell Wilson emphasized that the company's overall financials have improved since Tata acquired it from the government in early 2022, and shareholders now expect to see profits.
"We've been very consistent and have an aspiration to be profitable, clearly, shareholders now expect us to be profitable. We are making good progress, managing costs, revenues, efficiencies, as well as operations and net promoter score (NPS)," said Wilson.
NPS is a metric used to gauge customer loyalty and satisfaction. Overall NPS for Air India has increased by more than 45 points in the past 18 months.
Wilson said that they don't plan to make public the year by which they are targetting to become profitable, but the company is on the right path. "Since the privatisation, we've tripled cargo tonnage, doubled revenue, we've increased revenue from business class passengers, and corporate revenues have also been good. The uplift on these metric is very significant, so our trajectory is on a very good path," Wilson added.
The Air India group is in the middle of its five-year transformative journey called Vihaan.AI, which commenced in September 2022. The group is in its third phase, or 'the climb phase', which commenced in April 2024 and will end in March 2027. "In cricket terms, we're in day four of a test match, since this is a five-year program, we're entering year three. The benefits of the transformation are now visible," he said.
As part of this process, the airline has made significant investments in retrofitting narrow-body and wide-body aircraft to improve efficiency and passenger convenience. As per the airline, Air India ended FY25 with an on time performance (OTP) in the high 70s.
"The improvement in OTP is significantly better and higher than even what Vistara was operating at, similarly we exited the financial year with an NPS, which was also higher than what Vistara had been achieving. The financial trajectory is positive," said Wilson.
In the aviation industry parlance, on-time performance indicates the percentage of flights that arrive or depart within 15 minutes of their scheduled arrival or departure time. It's a key metric used by airlines and airports to track efficiency and reliability.
As per the CEO, Air India's custome NPS in new A350 widebody aircraft is above 60, which is higher than legacy widebody aircraft. Similarly, the airline is also upgrading lounges at key airports. "This clearly indicates that the foundations have been put in place already. There's further strengthening of capabilities for the future, but even so, the new Air India is already visible," Wilson said.
In April last year, Air India announced commencement of a retrofit program to change interiors and seats of its narrow-body and wide-body fleet. While the program has seen delay due to global supply chain issues, over 50% of Air India's fleet today offers new or upgraded cabin interiors.
The retrofit of Air India's legacy narrow-body fleet is expected to be completed this year, and currently 65% such aircraft already have been retrofitted. "So on the narrow-body side, we're about two-thirds of the way through the upgradation program. We'll complete the rest of it by the end of, mostly by the end of the calendar year," Wilson said.
Air India has also decided to extend life of 13 aircraft which were otherwise going to retire. The airline has decided to upgrade these aircraft as well.
Currently, around 35% of Air India's wide-body fleet features modernised interiors and the airline intends to complete retrofit of the remaining aircraft by the middle of the financial year 2028. "Our legacy Boeing 777 widebody aircraft have already undergone an initial refresh programme ahead of a full retrofit, which starts next year. Legacy Boeing 787 aircraft will go into July and the rest of the 27 legacy aircraft will be upgraded over the next couple of years," he added.