If there’s ever been an airline in desperate need of a successful turnaround, it’s Air India. The long-bloated, play-thing of the Indian government has finally been privatized, and the new plan — entitled Vihaan.AI — is out. I do not have hopes.
Air India has been a mess for as long as I can remember. It used to be the Indian government’s chosen instrument for international travel. Then in 2007 it was forced to merge with the Indian government’s chosen instrument for domestic travel, Indian Airlines. That sounds like it would be a good thing, but it did not go well.
As if a botched merger wasn’t enough of a problem… while Air India was saddled with terrible inefficiency and bureaucracy, private airlines were allowed to eat the airline’s lunch. First it was the now-deceased Jet Airways but more recently it has been the more efficient IndiGo which has surged to become the largest domestic airline in India by far with well over half the market. It has grown the pie while also stealing from Air India.
On the long-haul front, the Middle East carriers have gleefully spent years bulking up their flying into India to connect people from Africa, Europe, and the US. Emirates is effectively the national airline of India at this point when it comes to traveling beyond the border. Increasingly, there is little need for Air India to exist.
But, as is often the case (hello, Alitalia) India is letting national pride get in the way and won’t just let Air India die. At least it did finally let the airline go private. Tata Group took the airline over earlier this year, reclaiming the ownership it lost when the airline was nationalized in 1953.
To put it mildly, Tata has a lot going on. In the airline space alone, it already has its stakes in AirAsia as well as Vistara. Now it can add Air India and Air India Express to the mix. For those keeping score at home, that’s two semi-low cost carriers, one premium short-haul airline, and… whatever you want to call Air India. To say some rationalization is needed would be quite the understatement.
So now we have the Vihaan.AI plan to fix Air India, and it reads like something a consultant wrote. Step 1, find a good name for the program. Vihaan.AI apparently means “dawn of a new era” in Sanskrit. Check.
Step 2, come up with a variety of pillars for your go-forward plan. Also, make sure you call them “pillars.” Check. Air India has 5 of these:
- Exceptional customer experience
- Robust operations
- Industry-best talent
- Industry leadership
- Commercial efficiency and profitability
Note that Air India saved what really matters here to be last on the list.
Step 3, set some pretty hefty-sounding goals even if you have no intention of meeting them. Check. In the next 5 years, Air India wants to climb from having less than 10 percent of the domestic market to 30 percent. That sounds really aggressive… except that Vistara and AirAsia have 15 percent share. I don’t think anyone would be shocked to see that brought under the Air India banner to goose those market share numbers without making huge gains. If that’s not the case and Air India just wants to grow its own share, then oh my, good luck.
The international plan — at least in the press release — is much more vague just saying there will be “significant gains.” No matter what happens, Air India can say it met that goal.
The problem with this plan is that it doesn’t say anything that makes me believe Air India can outcompete those who already took all the relevance away from Air India in the first place. How is the airline going to beat much more nimble competitors like IndiGo or Emirates. Running a good operation? That’s just the price of admission to the competition. And having better customer service? Ditto.
There’s talk of having the best technology and attracting the best talent, but I don’t see how that happens without significantly overpaying people to effectively bribe them to come work for a subpar company. Even if they get good people, so what? That does not create a competitive advantage over the other airlines that already have good people. I need to see a niche or some differentiation, and I don’t see it.
Nobody ever thought turning Air India around would be easy, but you would have hoped that any serious effort would have something significantly more inspiring and actionable to give the airline a chance to succeed. This one may look good in a Powerpoint deck, so congratulations to the consultants who wrote it, but in reality this won’t fix an airline.