Sam ChuiI met with Air India CEO, Campbell Wilson on the transformation of Air India since the TATA group takeover. We discussed the new aircraft orders, existing aircraft retrofit, all the changes and challenges to revive Air India. The CEO also reacted to some skepticism about the changes. Here is the transcript of the Q&A:
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Q: This year, you'll receive six A350s (ex Aeroflot interiors). Any idea where these new A350 will be flying to?
Initially, it'll be flying on some domestic routes, which clearly isn't the ultimate objective. Europe will probably be next, and then once we get ETOP certification, then we'll fly to North America.
Q: How Air India is going to transform and when the changes are coming?
Well, that, that's a very big question.
Air India was in the 1960s, one of the best airlines in the world. It's got a long 90-year history. The past few years have been a bit challenging with under-investment. But now under the TATA group, which took ownership in January of 2022, there is a very significant effort to get Air India back to the heights it once was.
TATA Airline Group actually includes four airlines, Air India, Air India Express, Air Asia India, and Vistara. We are in the process of consolidating those four airlines into one full-service and one low-cost airline.
All of the airlines are going to have significant growth plans. Just a few months ago, we announced what is the world's largest single order for new aircraft, 470 firm aircraft from both Boeing and Airbus that will support the growth back to being one of the more significant airlines in the world.
Q: Your strategy is called Vihaan.AI? Can you briefly talk about it?
Vihaan is Sanskrit for the dawn of a new era. AI is obviously Air India.
it's a five-year, three-phase program. During the taxi phase, we committed to $70 billion worth of aircraft at list prices. We finalized an interior retrofit of all of our wide-body aircraft which cost $400 million, and will start rolling out in the middle of 2024.
We will lease 36 aircraft, including 11 wide bodies to start ramping up the growth internationally as well as domestically. (Include some B777-300/ER from Etihad)
Air India CEO Campbell Wilson
We've committed $200 million into re-platforming the IT systems. and we've recruited many, many thousands of staff, 10 times the number of cabin crew, 10 times the number of pilots that have been typically recruited in a given year to support the growth of Air India.
Q: What are the immediate challenges of the Vihaan.AI project?
The biggest challenge for us at the moment is simply the scale and pace of growth. It is a sizable airline. We carry over 100,000 people a day already.
We are taking in, in gross terms, about 70 aircraft this year. Net terms about 55 across the group. We have significant long-haul expansion to North America and to Europe. We need many thousands of crew during this process. We need to re-platform the business to better support the new network and the new scale of operations.
We need to build a training academy to train future pilots. We need to restructure our maintenance support. So there are many, many balls that we have to juggle in there. At the same time, it is growing fast and, and doing it safely. So it's certainly very, very busy. Every day is fun. Every week you come home thinking that we made it a bit better. But certainly, it's a lot of work.
Q: When do you think passengers can start feeling the new Air India?
Well, I think that's already started apparent.
We've changed all the menus. We've replaced seats, curtains, carpets, and seat cushions. We've repaired a lot of the inflight entertainment systems, particularly in first and business class that weren't previously working. We are making good progress in economy class despite supply chain constraints.
We attained the number one ranking for domestic punctuality for the first time in eight years and have consistently been amongst the top two or three in India.
So the changes are certainly coming. They are apparent. We see it in the feedback, we see it in the NPS scores.
Are we where we want to be? Not yet. Absolutely not. There are many, many years of under-investment and lack of recruitment and training that we need to overcome, but we are certainly making good progress.
Air India CEO Campbell Wilson
And I think the evidence is already apparent now if not quite, where we ultimately aspire to be.
Q: At what stage do Air Asia India, and Vistara going to merge into Air India?
So in the case of Air Asia India, all of the regulatory approvals with respect to competition and most of the other approvals have already been obtained. Air Asia India and Air India Express are operating as two separate air operator certificates under one CEO and MD. They're deeply in the process of integration. They're co-located, the websites, the reservation systems have all merged. We're about halfway through that process, but most of the heavy lifting is done that will become one low-cost carrier.
On the full-service side, we've started the process with Vistara merging into Air India. We haven't yet got the competition clearance. We've applied for it. It's in the process of being considered, but we're doing a lot of preparatory work for if and when that is approved. Once it is approved, we've got a very clear roadmap of how we will bring the two organizations together from people, processes, and systems to ensure that Air India is adopting the best of what Vistara has.
Whilst keeping the best of what Air India has, the low-cost process will probably take another nine months or so. The full-service process may be a year or a little bit longer.
Q: There are people I came across who are fairly skeptical about Air India's big plan...
I can understand people have trouble thinking of Air India in the same league as Singapore Airlines, Qatar or Emirates. But it took those airlines a long time to get to where they are too.
Air India CEO Campbell Wilson
The investment that is being made by TATA Group, 70 billion on aircraft, 200 million on IT, and 400 million on refitting the existing fleet is a pretty serious statement of intent.
Tata Group also owned Taj Hotels, which is renowned as one of the best hotel groups in the world. Air India itself was one of the best airlines in the world in the 1960s and 70s. The service culture of India is there. The ability of the group to provide a top-end experience is already there. The commitment in terms of resources and in terms of people is unquestioned.
Will it be done overnight? No, it will take some time, but I think you'll be surprised how fast it happens.