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Air India's landmark order indicates the airline’s focus, and should pose a major threat to Gulf carriers in the times to come

Ross Perot, Texas Billionaire and owner of EDS, once said, “Business is not just doing deals; business is having great products, doing great engineering, and providing tremendous service to customers. Finally, business is a cobweb of human relationships” — that sums up Air India’s present, past, and future.

Air India's landmark order with Airbus and Boeing indicates the airline’s focus, which will be operating an airline that has a network that goes further, faster, and longer; and should pose a major threat to Gulf carriers in the times to come.

Air India's induction of fifth-generation aircraft, the Airbus A350XWB will help the airline operate with improved efficiency, reliability, lesser groundings dovetailed with 35 per cent lower operating cost, and over 28 per cent of lesser carbon emissions. The strategy with Air India's 470 aircraft order bears an eerie resemblance with Star Alliance’s playbook. It almost looks like the Vihaan. AI plan tore a page from the Lufthansa Group AG’s global strategy.

More than being a much-needed imperative, Air India’s fleet expansion falls sneakily in line with the Star Alliance game plan of offering global connectivity right from India being the hub, bypassing other regional hubs such as Dubai, Abu Dhabi, Doha, and Bahrain. So does the fleet order, which bears an uncanny semblance of Lufthansa’s fleet, especially the Airbus to Boeing fleet imbalance. Air India’s broader game plan, with the eventual induction of Airbus and Boeing aircraft, will be to act as a critical catalyst with furthering the global reach of Star Alliance — the long-time arch nemesis of Gulf carriers Emirates, Etihad, Qatar Airways, and Gulf Air.

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It's No ‘Big’ Deal

After the collapse of Kingfisher Airlines, Jet Airways, Paramount Airways, Air Costa, and SpiceJet living on borrowed time for the last 10 years, India’s commercial airliner fleet has shrunk by over 350 tails with lessors taking back aircraft; and Air India scrapping its ageing Airbus A320 fleet. While IndiGo’s fleet induction made up for some of the gaps and shortfalls, India really didn’t have much of a great structured growth in fleet or capacity deployment. Further, in terms of effective numbers, India’s airliner fleet should have grown at a minimum of 10 per cent year-on-year, or 40 narrowbody and widebody aircraft coming in each year for the next 10 years beginning 2013. Air India’s logic of choosing the ‘auspicious’, specific number of 470 aircraft isn’t based on any great algorithm or scientific deduction, but the minimum number of aircraft that is required in India to just above replenish the minimum fleet required to sustain India’s commercial air transport business.

India with a population of 1.4 billion people has a shockingly low 800 aircraft in commercial revenue service — that’s one aircraft for 1.75 million people; whereas China has nearly 5,000 aircraft for a population of 1.4 billion or one aircraft for 280,000. So, if Tata really did want to be the disrupter it wanted to be with Air India, it should have ordered a minimum of 1,000 aircraft with options for another 500, which in effect would just about scratch the surface of getting somewhere with lowering the cost of air travel.

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The Maharajah’s Moment

Not long ago, the Government of India lambasted and despised the very existence of Air India. Around the time the airline was up for disinvestment, Air India and the Maharajah were the exiled pariah that India neither wanted to talk about nor had the desire or intent to resolve issues and challenges; except for palming it off to the first available bidder. Given this, it is cute that animosities appear short-lived when it comes to stealing its limelight. The government along with prime ministers and presidents of the United Kingdom, France, and the United States on February 14 crashed Tata's announcement party to claim honours for the ‘great feat’.

Air India’s troubled past and most of its financial predicament had been a result of the government’s over-interference; and from the looks of it that does not seem to end. Does it need reminding that Air India is now privately owned by the Tatas with Singapore Airlines holding a sizable 25 per cent chunk? For whatever its worth, this is the Maharajah’s moment and despite anybody trying to steal its thunder, the real winner is the Indian traveller, the global Indian diaspora, and, of course, the Tatas.

Air India 2.0 - A New Dawn

It might take a bit longer for travellers to notice visible changes with Air India since most of its pain points don’t lie with its fleet per se, but with moving forward its entire, monolith, juggernaut of an organisation to a newer working world standard, systems, processes, people skills, technology integration, and software systems that are standard with today’s, modern-day airline service. That can’t happen overnight.

The induction of cutting-edge, radical, new aircraft such as the innovative Airbus A350XWB and the Boeing 777X will need Air India to overhaul and baptise by fire its way of working, maintenance infrastructure, operating processes, and organisation management systems. That means, an Air India, from the ground up, will need to resemble an Emirates airline or a Lufthansa for actual changes to be seen. Merely inducting newer aircraft to create freshness with the product isn’t cutting it. Illustratively, it is a lot like a patient at a hospital having a heart attack, and instead of giving the best medical care available, the patient is given a new hairdo, a few botox injections, and sent away.

The first few deliveries as part of the new 470 aircraft order should start to trickle in by and around July to September, and should in some way bring in much-needed change with its product offering. While travellers would be delightfully surprised with a more comfortable cabin, plush seats, radical new inflight entertainment systems, high-speed Internet, better quality meals and beverages, cutting edge on-board navigation and cockpit automation, and improved safety of operation, behind the scenes Air India will have to work at breakneck speed to ensure all of this is aligned with world-class airport services, faster check-in, aircraft parking slots, quicker gate turns, cabin crew customer service skilling, an improving ticket booking and reservation system, and a better passenger digital experience.

Air India has a long way to go, and a lot needs to get done.… Please wait.

(Mark D Martin is CEO of Martin Consulting, and is member of the Royal Aeronautical Society United Kingdom.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.