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EconomyBusinessAir India: What you get, what you will from Tatas' airline explained

Air India: What you get, what you will from Tatas’ airline explained

Air India, which was until recently the country's public sector flier, once usurped from the Tata Group and transformed from Tata Airlines to Indian Airlines, is now back with its original owners. After some teething problems, Air India has been getting rave reviews, but the Tatas are not going to sit pretty on the laurels.

The Tata Group had on 27 January taken control of Air India after winning the bid for the airline on October 8 last year.

A major fleet expansion of Air India is afoot, with pilots who will retire at the age of 65 instead of 58, conforming to the standard of the Directorate General of Civil Aviation and several airlines globally. Air India will make this offer to pilots with impeccable records of safety and discipline.

Meanwhile, after the faux pas of offering Ilker Ayci — a past associate of the president of Turkey, the Islamist Recep Tayyip Erdoğan — the highest post in the company, the Tatas got the security clearance for another aviation veteran to be appointed as MD-CEO: Campbell Wilson, who was previously with Singapore Airlines.

Why did Air India suddenly feel the need for increasing the retirement age of pilots?

Air India wants to re-hire retired pilots for 5 years primarily to meet the objective of fleet expansion. "Considering future expansion plans for our fleet, it is imperative to meet our workforce requirement for pilots. DGCA allows pilots to fly till the age of 65 years, compared to Air India's (older) retirement age of 58 years. Allowing pilots to fly till the age of 65 is a practice followed by most airlines in the industry. To meet our requirement, it is proposed to retain our current trained pilots at Air India post-retirement on a contractual basis for 5 years extendable to 65 years," SD Tripathi, the chief human resource officer (CHRO) of Air India, said in the 29 July speech on the policy on the post-retirement engagement of pilots.

How can people be assured of their safety in the hands of ageing pilots?

Air India has put in place a screening process to select pilots who would get an extension beyond 58. "A committee comprising of the functional representatives of HR, operations and flight safety will be constituted to examine the eligibility of pilots retiring in the next two years. The committee will be responsible for reviewing the past records of the pilots with respect to discipline, flight safety and vigilance. Post the review, the committee will recommend shortlisted names to the CHRO for issuing them post-retirement contract," the policy says.

"One year prior to pilots' retirement, they will be issued a letter of intent for their post-retirement engagement. The contract would be issued for a period of five years extendable up to 65 years. The post-retirement contract will include a clause for an annual review of the contract basis performance, conduct and flight safety record. On completion of five years of satisfactory service, a comprehensive examination of their performance will be considered for further extension till 65 years. This will be reviewed by the constituted committee," Tripathi’s policy says.

Additionally, for airport entry passes and company ID card purposes, the pilots’ application forms will reflect their date of retirement as and when they achieve the age of 65 years so that there can be timely AEP renewal/issuance at the time of post-retirement engagement, it adds.

Are only old pilots staying on?

The Tata Group introduced the voluntary retirement scheme (VRS) on 1 June. Around 4,500 employees opted for retirement under the scheme. Additionally, 4,000 more people will retire from the company in the next two years.

The Tata Group has also launched a major recruitment drive in metro cities to hire new talent.

How has it performed in the past 6 months since the takeover?

As of January 2022, the airline had a market share of 10.2%. It had moved a bit closer to the second spot even though it carried less than half the passengers it did two years ago pre-lockdown. The market itself stands shrunk now.

But the very next month, Air India took the No. 2 position in the Indian aviation market. While one would have thought that there would be no looking back since then, the story has not played out that way.

In June, Air India slid to the fifth position.

On-time performance is a competitive element. The airline has been either at the fourth or fifth spot all along since January, even as its on-time performance fluctuated between 81 and 92% in the said period. While every airline may want to be punctual, it’s easier said than done.

IndiGo, once renowned for punctuality, has not been on the top of the monthly charts for a while now. Go Air had dislodged it for over a year consistently before the pandemic.

Interestingly, 55% of IndiGo flights were delayed on the day Air India began recruiting, as the IndiGo crew almost applied for mass leave on 3 July!

A hub-and-spoke model implies that a delay on one flight could have a cascading effect on others. Besides, the Tata Group has to rely on third-party ground handling agencies at quite a few airports, which means it does not have full control over all factors that determine on-time performance.

Air India will have to strive really hard to reach a point where it can be among the top two, if not No. 1 for on-time performance.

Air India's slipping to the fifth spot in market share, with sister concern Vistara overtaking Air India in market share, implies also that Air India made the least of the traffic from January to May. Domestic air traffic in India almost doubled during this period, going up to 11.4 million in May from 6.4 million in January. Air India, on the other hand, moved from 655,809 passengers in January to 826,023 in April and 822,814 in May. It was the only carrier to carry fewer passengers in May than in April.

The airline deployed 8% fewer flights in May than in January even as there were 36% additional departures in the domestic sector. The load factor went from about 60% in January to just over 80% in May during this time, meaning the airline was flying fuller planes. But then, it made sense to operate fewer flights with higher loads than more flights with lower loads when aviation turbine fuel prices are at an all-time high, airfares are capped and passenger traffic is not back to pre-pandemic levels.

The airline operated a daily average of 230 domestic departures when the year started and this figure dropped by an average of 15 flights a day in May. This seems to be a mix of ad hoc arrangements to get loss-making flights out of the network and handle the limited fleet in a profitable manner.

The first ones to get the chop would be the most non-profitable routes on the domestic front even as international operations do well currently due to higher fares and demand and the fact that it is not as cut-throat as the domestic market.

How is Air India performing in the stock market?

Air India was expected to lose Rs 9,779 crore in 2021. Buyers were sensitive to the image of the company owing to the CEO appointment glitch. The group has reportedly been more cautious about its approach ever since.

But with challenges all around, anything that plugs losses will be the priority for the Tatas. Market share concerns can wait!

What has been the customer feedback about Air India since the Tatas took it over?

Several social media posts complain about the meals, but food reviews are based on personal tastes and preferences. 

What does renewed Air India have in offer for passengers?

Essentially, many more flights. The Tata Group is placing a big order for its airlines. The Airbus A350 has been selected as the wide body option and a choice for single aisles is going to be made shortly.

Essentially, many more flights. The Tata Group is placing a big order for its airlines. The Airbus A350 has been selected as the wide body option and a choice for single aisles is going to be made shortly.

Air India received around 1,000 passenger complaints during the last three months related to various issues, including the refund of fares, overbooking of flights, and staff behaviour, Minister of State for Civil Aviation VK Singh said two weeks ago.

Travel technology company Amadeus is now providing its passenger service system to Air India as the airline works on ways to improve operational efficiency as well as customer experience. Air India is implementing the full Amadeus Alta PSS (Passenger Service System) suite, including components ranging from revenue management, revenue accounting, retailing and merchandising, website, mobile and frequent flyer programme management, Amadeus said in a statement.

The carrier signed an with Amadeus in this regard on 4 July.

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