In a recent interview, Wilson spoke to ET about the progress Air India is making in its long, arduous journey to regaining its long-lost status as a globally relevant airline. Edited excerpts:
Q1) Let’s start with Air India’s transformation project. The first phase was taxi, which was focussed on legacy issues. The airline is six months into the next phase which is called takeoff, which is focused on developing the platforms, processes and systems needed to build a product of exellence. Where is Air India at right now and how do the next 100 days look like?
Ans: We have a five-year roadmap called Vihaan, which has three phases. The first one was the “taxi” phase, which was until March of 2023, where we were really triaging and trying to address all of the accumulated issues of the past.
This current phase, which you rightly note we’re halfway through, is where we’re building all of the platforms and capabilities to support very aggressive growth. That includes the 470 aircraft that we announced earlier this year, and putting a lot of the platforms in place.
We’ve also launched the new brand of Air India, which will manifest across the network very soon. And we’ve started taking delivery at a very rapid rate. We are now taking an aircraft on average every six days and we’ll continue to do so for about the next 18 months.
Over the next hundred days, we see the first Airbus A350 come into the Indian skies in new brand colors. We see the new website and app. There are many things we will reveal, basis work that has been happening behind the scenes over the last 18 months.
Q2) What can passengers expect from the new A350s, the airline’s first set of deliveries, in terms of a new product?
Ans: I think we’ll leave the onboard product to be a surprise. We’ll reveal that at the time when we have the physical aircraft that we can show everyone.
I think it is just another step forward for us. We are taking 11 Boeing 777 planes this year, of which we already have seven. The Airbus A350s will be a continuation of this and by the time that all six are in place in March, about one quarter of our wide body fleet will essentially be sporting the latest generation product. Then in July,-August of next year, we put our all legacy aircraft through a retrofit program, which will take about 18 months so that by the end of 2025, all of our aircraft have been upgraded to the latest standards of seats and entertainment and other amenities.
Q3) ..and yet some legacy issues remain. From a high level of 91% in April, the airline’s on-time performance in major airports fell to the low 70s and has been among the bottom three in the last few months.
That and some other issues have made sure customer perception of Air India isn’t still where it should be perhaps. Can we still Air India is in take-off mode?
Ans: Every airline suffers flight delays occasionally and flight cancellations due to weather or technical reasons. The challenge is how well we cope with that. Clearly, in some cases, we haven’t coped as well as we could have and should. And these are learning experiences that we have to take to improve our policies and processes and training to make sure we get better. I think it also needs to be kept in mind where we’re coming from.
This is an airline that has had very little investment in technology, people, processes and aircraft. So we’ve had to spend a huge amount of money to bring things up to a temporary standard, let alone a world class one.
So it takes time. And, I think it’s unrealistic to expect that you can snap your fingers and do it overnight.
It’s a multifaceted problem. We are working hard at it. I think we’re making good progress. We’re certainly not at the end of the journey. In fact, we’ll never be at the end of the journey because the bar will keep getting higher. But we’re committed to be world class. And I’m super confident we’ll get there in a reasonable amount of time.
Q4) Do you think customer perception and safety are challenges that Air India will continue to grapple with for some time?
Ans: Safety is as much a system and a culture as it is about investments. We have brought people in from some of the best carriers in the world to bring in an external perspective to complement the local one to make sure that we are, on par or better than the international expectation.
We have deployed many new policies with clear guidelines as well as consequences. We are implementing firmer rules on how we handle certain things: the way we handle people who might be disruptive to the practices that our crew must follow when they’re operating aircraft.
With respect to customer service, I’ve talked about the number of aircraft that we’ve already brought in with improved seats and in flight entertainment. There’s certainly been a concerted effort to upgrade our catering across the network internationally and domestically.
Is it where we ultimately aspire to be? Not yet, but we’re getting there. We’re getting better every day.
Q5) How is the integration with Vistara going? Also whenever such an integration is on and before it’s complete, isn’t there fear of one cannibalising the business of the other? How do you handle that?
Ans: Until and unless we get clearance from all of the competition authorities, we can’t coordinate schedules or pricing or any other commercially sensitive things. So we’ll be as if we are. Once we get the competition clearance, the path to sharing information becomes open and then we can avoid such cannibalization and indeed, more importantly, we can improve coordination so that ultimately there’s a better schedule spread.
For example, there’s better sharing of loyalty benefits and other things which accrue to the customers’ benefit. That’s work in progress.
Q 6) Let’s talk financials. Air India’s net losses grew to Rs 11,000 crore in FY23. That is of course a given as the airline is making a lot of investments in new assets and infrastructure and talent and must be allowed the gestation period that is standard for making money in this industry. But you have been also talking about the concerted efforts in mitigating the airline’s daily operating losses. Where is that at right now?
Ans: I think we are making progress. Everything that we do is with two objectives in mind: one is to become more efficient and reduce costs, which entails a lot of the systems and processes that we’re putting in place, the new aircraft, which will operate more efficiently.
On the other side, most of what we’re doing is to improve revenues, such as expanding distribution into new markets. Previously Air India, for example, didn’t distribute seats through one of the largest distribution systems in North America, which is a critical market. It didn’t have a product that was credible to the commercial international traveler because neither the reputation nor the punctuality was there.
We are now investing in better relations with travel agents, not just in India, but overseas for better revenue management so that we can increase the average airfare whilst we continue to offer competitive prices at the lower end of the range.
There are many things that it takes to run a successful airline. And most of the world class airlines have had decades to refine this. Air India has had 18 months. We are hard at it across the board, and we are making good progress. This is a test match not a T20.
Q7) How is Air India leveraging its parent’s strengths in the form of its wide range of businesses?
Ans: We work with many Tata enterprises. Tata Technologies has done some work for us in digitizing certain seat components so we can get spares manufactured amongst other things.
Apart from that, TCS, Tata Communications, Tata Elxsi are helping us with a lot of design work.
Q 8) How is Air India using and leveraging on AI?
Ans: We recently launched a generative AI powered chatbot. I think it’s quite transformative in terms of the way it addresses customers’ questions.
I think what Air India has done is really quite path breaking. We are one of the few companies in the world that are using Microsoft’s copilot, embedded into our enterprise suite. And many teams across the business are hard at work, thinking about how we can bring it into our daily business life, not just as an individual using it, but using it behind the scenes to improve such things as revenue management. And so I do think it’s going to be quite transformative.
Q 9) Air India investing heavily in a training center. There are also talks of incoming investments from aerospace majors like L3Harris and Airbus. Would you throw some light on that?
Ans: I think Air India has always taken the responsibility of training its staff very seriously. And with our huge expansion, the number of pilots, cabin crew, engineers and ground staff that we will require to support this fleet is significant.
We have invested in a very sizable training facility in Gurgaon. We are partnering with a couple of OEMs to set up simulator training centers. We are talking to a number of OEMs including Airbus, Boeing and L3Harris.
We will be talking about it in a bit more detail probably early next year. We will hopefully be inducting the first group of cabin crew in January.
Q10) Air India has appointed British Airways and Air Canada veteran Klaus Goersch recently as its chief operating officer. Choora Singh who was formerly with Ryan Air has come in to look at integrated operations control. Another aviation veteran Rod Butcher has joined as a consultant. You of course led Scoot before joining here
Isn’t the Indian airline industry evolved enough to have indigenous successful CEOs lead big carriers to success that they still have to depend on an expatriate top management? Do you think there is more need to groom Indian top management talent in airlines
Ans: If you look at the context, we had one airline in India or two, if you include Air India Express, that were government-owned enterprises.
And so it didn’t have the private sector practices that people would have been exposed to outside of the country in private sector airlines. You had a lot of relatively small airlines which again, doesn’t give people the exposure and experience of running a larger enterprise.
So in that context, it’s not really so surprising that the talent pool of people that were experienced running large private sector airlines was relatively small. That will change. We’ve now got two airlines at least, and who knows in the future, maybe more will come. To the extent that we can promote from within, we absolutely want to do so.
And as Air India sort of rebuilds itself and builds its pipeline and inducts people at all levels in the organization, uh, the long term intent is to increasingly be self fulfilling when it comes to talent.
Q 11) Finally, how do you react to the thought that the Indian airline industry is veering towards a duopoly between IndiGo and Air India, and the fact that such a duopoly may not be good news for airline customers?
Ans: Well, one, there isn’t a duopoly at the moment. Two, if you look at other similar markets around the world, they also went through a period where they had a large number of relatively small undercapitalized airlines. And that is just not indicative of a healthy or sustainable aviation market.
Now we are in a situation where you have at least two well capitalized professionally operated profits; motivated enterprises that will, I believe, bring some stability, profitability, investment and growth to the market.
When there’s a stable market that’s professionally operating with a profit pool, other competitors will see an opportunity to come in. And that’s what you’ve seen in places like Europe and North America, where they went through a phase of consolidation, but then they’ve mushroomed into a very healthy aviation ecosystem where there are multiple players serving different levels of the market and providing the customer a range of choices for what they want.
India has been grossly underserved internationally by Indian airlines. The fact that India as a country, before the privatization of Air India, had less than 50 wide body aircraft for a country of 1. 3 billion people, where some very much smaller countries in our neighborhood had multiples of that number of aircraft, shows that Indian airlines’ ability to connect Indian cities with the major cities of the world was woefully below what the market was demanding.
So I think, looking at things in a broader context and perhaps over a longer period of time, this is a necessary and important transition to what is a much better future for Indian aviation and India.