4 days ago
Confident that reality of Air India will change, so will its perception: Air India CEO and MD Campbell Wilson
Back in the Tata fold since early 2022, Air India is halfway through its ambitious transformation programme to turn into a world class airline. Air India CEO and MD CAMPBELL WILSON is confident that despite various headwinds, including supply chain disruption and aircraft delivery delays, the turnaround is well on track and the new Air India should be 'consistently visible' by the end of 2027. In an interaction with THE INDIAN EXPRESS, Wilson provides a glimpse into the airline's strategy, expansion plans, and the vision to reclaim its once-glorious past. He also talks about the challenges ahead, including the recent airspace closure by Pakistan, and burden of a negative image from Air India's government ownership days.
Edited excerpts:
What is the current status of Air India's transformation plan? By when will the new Air India fully emerge?
The behind-the-scenes heavy lifting is complete—merger of four Tata airlines into two, IT landscape re-platforming, induction of about 9,000 net new staff with contemporary skills and capabilities, significant increase in the operational aircraft fleet, etc. What remains to be completed is the legacy fleet's rehabilitation. We're about two-thirds of the way through the narrow-body aircraft (refit programme). It should be completed by year-end. As for the legacy wide-body aircraft, which everyone desperately wants to see upgraded, the first plane goes in for a full interior refit in July, and will be back in service around September-October. Then two-three (wide-body) aircraft will go for refit each month. By about 2027-end, we should have the new Air India consistently visible. We can already see it on our new Airbus A350s which are getting very good reviews…The focus is to bring the entire fleet up to that standard.
Privatisation has changed Air India notably, but its not-so-positive legacy image still casts a shadow, particularly when it comes to product and service-related issues.
It takes a while for people's perception to change and every national carrier in any country tends to get more than its fair share of both positive and negative commentary. Until we are consistent—and fleet is a big indicator of consistency—this will continue. The ball is now in our court to get these legacy issues resolved…I'm very confident that the reality of Air India will change, and the perception will start to follow.
Pakistani airspace closure has hit Air India the hardest. How are you dealing with the situation? What is your value proposition to passengers in this scenario?
On some routes (North America, Europe, and some West Asian cities), we now have slightly longer flying times—about an hour for Europe and up to three hours for North America. Initially, we took an intermediate refuelling halt on a number of non-stop flights, but we've since been able to re-optimise the flight paths such that we've reinstated most of the non-stop services. Only a few flights continue to have a refuelling stop. So, our non-stop value proposition continues. Also, the longer flight time and even the refuelling stop are still much less than the time you would incur should you transit at another airport.
It does add a little bit of inconvenience to customers as well as us, and it adds a significant amount of cost (estimated at around $600 million on annualised basis). But that's the nature of our business and we have to adjust and move forward.
New aircraft are key to Air India's product transformation and you have massive orders with Boeing and Airbus, but there have been some delays in the deliveries. What is the update on delivery schedules?
Both Boeing and Airbus have had supply challenges and delivery delays. The sense we get now is that they seem to be getting through them and are more confident. Compared to the delivery stream when we signed the contract (in 2023), there are delays of 6-12 months. At this point, we don't expect it to worsen. We should receive the aircraft just slightly later than we had hoped. The good news is that having made a huge commitment of buying 570 aircraft, our place in the queue is assured and we are in a reasonably healthy position. We know that we are going to get the aircraft, even if we don't know exactly when.
We haven't publicly stated the duration over which all the aircraft will be delivered, but certainly it will be to the end of the decade. And the more recent addition we made (adding another 100 aircraft to the order) is for the early part of the next decade.
Is the persistent uncertainty around the trade war and tariffs leading to any impediment for Air India?
It's an uncertain environment. The short answer is we don't really have full visibility yet, because it's a moving target. Some suppliers have indicated to us that they're watching the tariff situation and considering likely implications. But there's been no explicit moves thus far.
The government as well as Air India have a vision to make India a global aviation hub with significant transit passenger traffic. Is it realistically achievable?
It is already being done. The share of transfer traffic for us has gone up by a factor of four times because of the addition of legs on either side of the connection and by making connections more convenient in terms of time and process. I-to-I (international-to-international transit traffic) now makes up around 10 per cent of Air India's international traffic. As we improve the product, people are much more likely to consider Air India as a travel option to go somewhere besides India. The opportunity is astonishingly big. The beauty of India is that it (transfer traffic) will always be a nice-to-have, not a must-have. Whereas for other countries that may be much smaller, transfer traffic is really all they have. We have the luxury of a huge to and from market, as well as the opportunity of a huge through market.
Take us through Air India's network development strategy over the past three years since the Tata group took over the airline.
We went from less than 100 operating aircraft to more than 300. We added 17 wide-body aircraft, which was a significant increase of 33-odd per cent, as well as rehabilitated a number of aircraft that were grounded for want of spare parts. It has allowed us to add 12 international cities, a number of new routes into North America, Europe, Southeast Asia, Australasia, and the Middle East, and significantly expand international footprint. We've also restructured the network such that our international flights connect better in terms of connection times—say, around two hours instead of 12 or 18 hours. We've become more relevant to people traveling via India, rather than just to and from India. With the huge number of aircraft (over 500) coming our way, you'll see a step change in the reach, frequency, convenience, and connectivity in our network over the next few years.
Which are your focus geographies for expanding Air India's international footprint?
About 65 per cent of that capacity is international, and a significant proportion of that is long-haul international. That's where we'll continue to invest a lot because it has historically been Air India's core strength, and should continue to be so. North America was obviously a focus for expansion over the past few years, and will continue to be. We've doubled the capacity into the UK and dramatically expanded the footprint in Europe. In Southeast Asia, we have expanded a to a number of new cities, and that provides the connectivity across India, and then Australia, and in time to come, even New Zealand, are markets where we want to deploy capacity.
At the group level, how are the synergies between Air India and its low-cost carrier Air India Express playing out in terms of network strategy?
Previously, we were trying to optimise, but it was two parties talking about optimisation. Now we've got literally one group that is looking at the network in totality. From almost the first few weeks of the merged Air India-Vistara entity, we had significantly restructured so that we were not flying duplicate timings and we also deployed our best aircraft on the metro-metro routes. As for our low-cost carrier, we are putting it in markets where it can support the broader group network from a transfer traffic perspective, or operate greenfield territories, such as the Hindon Airport, where Air India Express now has significant presence. It will also likely be the vehicle through which we start operations at the Navi Mumbai airport.
Sukalp Sharma is a Senior Assistant Editor with The Indian Express and writes on a host of subjects and sectors, notably energy and aviation. He has over 13 years of experience in journalism with a body of work spanning areas like politics, development, equity markets, corporates, trade, and economic policy. He considers himself an above-average photographer, which goes well with his love for travel. ... Read More
