Air India : Keeping the Sinking Ship Afloat

  • July 22, 2009
  • Uncategorized
  • 7 Comments
  • kflyer

Air India is sinking and long gone is the golden era of J.R.D Tata, no doubt. But the Indian government does not want it to sink, so what can be done to keep it afloat ? That’s what we’re going to discuss now.

Keeping Afloat Sinking Air India Bjoern Schmitt – World of Aviation

The Indian government had stated about turning Air India into a low-cost airline and while this would not be a complete solution, something along the lines of what Shashank Nigam suggested would be worth looking at.
Whatever it takes, Air India needs to do a boatload of cost cutting and needs some serious business discipline. To make this a reality, they need a good CEO and a sound management team. I would not suggest that they must appoint a foreign national, but I personally wonder whether they’ll be able to find such a capable and experienced airline executive from India. Someone with talents similar to Temel Kotil, Robert Fyfe or Tony Fernandes would be a good fit for the ailing national carrier.

Indian Airlines 737 M. Azizul Islam

Rationalization
Air India currently has four divisions – Air India Express, Indian, Air India Regional and Air India itself. While diversifying the business is good, there is a clear overlapping in the missions of these airlines. To avoid this, Air India needs to rationalize its units.
Three units could be enough
1. International arm
2. Domestic arm
3. Low cost arm

A favorable approach would be making Air India international only, Indian domestic only and Air India Express the low cost carrier.

Branding
It is pretty evident that Air India is not a strong brand. While there is a lot to be done to make a strong and resembling brand, Air India needs to simplify and unify its brand, do some good marketing and live up to the expectations. That would be, delivering what it promises and promising only what it can.

Service levels
Again, Air India needs to simplifly its service levels and promise the customer what it can deliver. But to compete, Air India also needs a strong product – but this should not be hurting the bottomline. So, the current product onboard its 777 could be accepted, but they need to unify it throughout all of its long-haul fleet. Fare structures should also be more simple and the low-cost domestic service could be a good solution.

Fleet
Air India’s fleet rationalization is a must, but securing financing for its huge backlog will also not be an easy task. Hence Air India needs to increase utilization and in the same time, phase out older aircraft. Deferrings and cancellations must not come at the cost of cutting the service.

A fleet similar to the following would be nice.

Airbus A320 family – to be operated by Indian on domestic and regional routes
Boeing 737-800 – to be operated by Air India Express
Both of the above fleets should be replaced by a single fleet type when their synchronization occurs when Airbus and Boeing will have developed their next generation narrowbody

Airbus A330-200 – to be operated by Air India and medium and long-haul routes.
To be replaced by 787-8

Boeing 787-8 – to be operated by Air India

Boeing 777-200ER/200LR/300ER to be operated by Air India

The Boeing 747-300s should be immediately phased out. A310-300s should also be phased out soon since this aircraft does not perform a special mission and could be easily replaced by the A330s but could also be converted into freighters. The Boeing 747-400s can stay in the fleet for a few more years.
The cargo fleet should consist of the A310 freighters and if possible, 777-200LRFs.

New Air India economy class New Air India Economy class. Lasse Kaila

Expansion
16 international destinations never help Air India to compete with the likes of Emirates and Etihad who continue to steal Air India’s traffic and Air India should rapidly expand. This investment would be worth it when the market returns to normal.

For the moment, new A330-200 flights should be launched to
Sydney, Australia (SYD)
Manchester, United Kingdom (MAN)
and,
Milan, Italy (MXP).

The Singapore and Bangkok services currently operated by Indian should be transferred to Air India . Air India should use its 777-300ER equipment in both of these routes ( for use on a daily BOM-SIN and DEL-BKK ) and compete effectively and somehow regain its lost market share.

More new destinations should be added when 787-8 begin to arrive.

If Air India is able to complete the above steps successfully, it could enter a good path to success. But the government should also keep in mind that profits do not come overnight and should make sure not to spoil the carrier and also to keep it free of politics.

What do you think of the above plan ? Please leave a comment. I may have made some mistakes, so make sure to point out them too.

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