In October 2021, the government had finally decided to hand over Air India by way of the disinvestment process to the Tatas. It was a homecoming of sorts, considering that the iconic JRD Tata had founded the Air India. Finally, the airline was given over to the Tatas in January, and the transition is underway.
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CNBC-TV18’s Shereen Bhan spoke to Campbell Wilson, MD & CEO of Air India, on the flight path for airline going forward.
Q: What would the ballpark number be, given the fleet expansion aspirations that you have, as well as everything else that you want to fix on the back end? And where is the capital going to come in from are you looking for capital outside of the promoters?
A: We are negotiating a very hard bargain. But it is big numbers ... in the context of rebuilding an airline, a world class airline, an airline with a global reach that represents and takes India to the world. So the numbers are big. But the ambition is big and I think we have got the backing and the support to do it.
With respect to how long it takes, it is going to take a while. It is not a T20. This is a Test match and in a Test match, you have different milestones on the way to 100 — you need to be patient, you need to be ambitious, you need to be sometimes a little bit lucky, sometimes just go (for) sixes but mostly it's about application, patience, and scoring those ones and twos consistently over time to reach the objective.
Q: Since you are talking about scoring the ones, and twos, let me pick up on that. There was a fleet expansion plan, which started by the end of this year, and it continues, through the early part of next year as well is that on track how many aircraft you intend to have on board between December to the first quarter of next year?
A: So we started with a number of aircraft that were grounded and over the course of the last five or six months, we have spent a lot of time working with Boeing and other OEMs to get these aircraft back into service. We put 16 aircraft back into service, we have got another 12 to go. So that has enabled some expansion.
The next immediate phase of expansion comes with leasing of the aircraft. We have five wide-body aircraft that we have already announced. We are deploying to particularly North American markets, and then 25 narrow bodies that will come in in the early part of next year in order to support the short haul or domestic fleet. We are in conversations with other lessors to bring in more narrow bodies and wide bodies throughout the course of 2023. And of course, then we have got our OEM discussions with Boeing and Airbus and the engine manufacturers, which will then take the fleet expansion forward with the aircraft that we will own and then carry forward from 2024 onwards.
So we will increase the actual operating fleet from about 30, maybe nearly to 60. But in part of 2023, and from 50 odd to probably 75 in the narrow body space.
Q: Speaking of challenging tasks ahead of you, you have got of course, the aspiration of being able to take your market share to 30 percent, but that's as part of your five year transformation plan. In the near term, you are at about 8.4 percent as of today, slipping a little bit back and forth over the last few months. But what is it that in the interim that you believe you are going to be able to improve on given the fact that you are adding capacity as well?
A: In the context of market share, leased aircraft in is one area in which we have got some already signed. We are in conversation for more. So it's a five year project to get to 30 percent market share. There is various ways to do it. But we are quite confident that what we are very confident of doing so. And yes, it is going to be step by step, as I say all those ones and twos will add up.
Q: Is the Maharajah coming back or not?
A: The Maharajah is still there. We have many, many assets — after 90 years of heritage, we have many, many assets at Air India’s disposal and we want to use them all to our best advantage. At the same time, as we represent the company in a modern way that represents India. India was the best airline in the world in the late 60s, but doing now what we did then wouldn't make us the best-deal airline in the world. We have to benchmark against the best and do what it takes to get there. And there is every resolve and commitment both from employees as well as from shareholders and certainly, that's my mission to make sure we get there.
Q: You talked about the use of technology and how you have been able to sort of upgrade your app, and so on and so forth, and that is a big focus area for a lot of airlines, including many Indian airlines. That is the area of expertise for the house of Tatas has as well, where have you already started to see much more of the integration and the synergy play itself out so far?
A: Across the board so other parts of the Tata Group have been contributing significantly with respect to providing services to us, obviously, on a commercial basis. Some of our management team have come from Tata, digital, TCS, other parts of the Tata Group, and bring with them understanding of how different parts of the conglomerate can help.
Tata Technologies, for example — Air India's (faulty) seats I think has been acknowledged, sometimes the recliners didn't work so well, and sometimes there were some components that needed to be replaced. And in a scarcity-of-resources environment, that couldn't happen. We have been able to go out and buy all of those for the most part and recover this. But there are some spares that we couldn't get. So Tata Technologies that has actually done 3D modeling of these parts and constructed these parts from scratch, and recovered the quality of our product.
So all parts of Tata are coming in. For example, Tata Motors have a very, very established procurement process and we have had some folks from Tata Motors come and, and really help us design a world-class procurement system that can then support Air India. We have had teams from Tata Business Excellence, which is a programme whereby executives, typically young executives, from different companies come together to really go and do business diagnosis and recommendations and analysis for other companies in the Tata Group.
There has been a fantastic team of men and women with us for six months doing this sort of assistance within Air India and executing a number of these recommendations. So in another sports analogy, I guess it's a full-court press of effort and attention.
Q: I want to understand from you as an outsider who has worked in the aviation market, outside of India, and now you are here, operating Air India. This is an exciting market, from a demand perspective, from a growth perspective. But it has also been a market where we have seen many airlines launch and many airlines shut down. What's your mind that the specific issues that you believe are peculiar to the Indian aviation sector? Are they largely regulatory? Or do you believe that it's just poor choices being made by airlines that have run in this country or a little bit of both?
A: I wouldn't want to get into those specifics, to be honest, because many of the reasons that cause the I guess the ebb and flow that you describe no longer prevail, or don't prevail, at least in the future horizon we are looking at. We think the ingredients for success are very, very clear. We have a geographic position which is second to none. We have economic growth, which is the strongest of any major country; we have a 1.4 billion population and a 35 million diaspora that is the most affluent of most diaspora in any country that exists.
We have patient capital with big ambitions to support India, we have a resurgent India that is representing itself strongly on the world stage. We have geopolitics, which is changing supply lines and supply chains and people's view of where production and manufacturing can be based on. All of these ingredients lead to what I see as just an exciting decade, an unprecedentedly exciting decade for Indian aviation. And so there is no better place to be in the world than here right now as far as I am concerned.
For full interview, watch accompanying video