Did the Tatas make a mistake in buying Air India? Does the steady stream of criticism levelled at the airline, normally from angry passengers who have suffered at its hands, reflect badly on their reputation? After all, the Tata Group has previously seen success in such consumer-facing companies as Titan, Tanishq, Croma, and, of course, the Taj Hotels. Would JRD Tata be proud of how Air India has fared since it was brought back into the Tata fold?
There are short answers to these questions. Yes, the Tatas seem to have bitten off more than they can chew. Yes, the failures of Air India damage the reputation of the whole group. And I am sure that JRD Tata would be apoplectic with rage if he saw how the group is running Air India now. Even Ratan Tata, who pushed the group into bidding for Air India, would not be delighted by how things have turned out.
But there are also longer, less simplistic, answers to the same questions. The Tatas always knew it would take time to turn Air India around. They just didn’t realise that the management they hired would keep screwing up so badly on the road to recovery, or that their own reputation would take such a beating.
And perhaps the most important answer to all of those questions is that the Air India management, instead of recognising its failures, is misrepresenting the situation. It’s taking the line that once Bombay House spends billions of dollars on new planes, everything will get better. Once the money is spent, we are told, Air India will magically improve.
In the most recent and longest interview I have read, Air India CEO Campbell Wilson dismissed the problems passengers complain about. “It’s a mass transportation business and unfortunately, you know, there are occasions when it is not perfect,” he said to NDTV’s Vishnu Som.
Much of that interview, like everything else the Air India management has said recently, was about the new planes it was going to buy. About $70 billion will be spent on 470 new aircraft over the next few years.
‘Public sector mindset’
The continual chatter is about how passengers will have to wait for the new planes to arrive before they can actually enjoy travelling Air India. Meanwhile, the airline’s apologists and PR people suggest the problem is the useless old staff at the airline who have a “public sector mindset”. So what can anyone do?
There is something to these positions. Yes, Air India does need new planes. One of its biggest problems is the condition of its fleet, as anyone who has flown Air India to North America over the last few years will tell you. And yes, it is always more difficult to turn around an established company than it is to start a new one.
But a lot of this stuff relies on lies and myth-making. It is true that the old Tata Airlines was nationalised and turned into Air India, but this was not unusual in that era. Till the late 20th century, most national carriers—Air France, British Airways (then BOAC), Lufthansa, and others—were all largely government-owned. So there was nothing odd about our national carrier being part of the public sector.
Certainly, JRD Tata was content to accept it. He stayed on as chairman and ran it to his high standards. What we consider the glory days of Air India all came when it was government-owned—when the Tatas had no share in it.
It is fair to say though, that after 1978, when Morarji Desai summarily removed JRD Tata from his post, government interference in the running of Air India increased. But it is wrong to suggest that the airline was always an unprofitable white elephant.
Rajan Jaitly successfully turned Air India around in the 1980s. And by the early 1990s, when Yogi Deveshwar was its CEO, Air India’s proud boast was that it was making a profit of Rs 1 crore a day. (Which was a lot of money back then; Air India is nowhere near making those kinds of profits these days.)
So all the “public sector mentality” stuff is a bit of a red herring. A good and forceful management could always run Air India well. The problem was never the employees. It was that ministers and joint secretaries felt that they had the right to instruct the MD on how to run the airline. Competent managers risked being ignored, bypassed, or humiliated.
The greatest benefit of privatisation is that Wilson and his colleagues don’t have to mollify politicians or be pushed around by civil servants. That alone should have liberated the new Air India management. It was, in fact, the main argument for privatisation. But so far, there are relatively few areas where you can say that passengers have a better deal today than they did in the nationalised days.
As for the constant slurs against the employees and the suggestion that they, not the newly brought-in managers, are responsible for Air India‘s problems, Wilson himself destroyed that argument in the NDTV interview.
After approvingly quoting The Economist, which described managing Air India as the Everest of corporate turnarounds (which, I guess, would make Wilson a latter–day Edmund Hillary), he bragged that the airline had hired 9,000 new staff. The average age of employees had come down to 35 from 54, he added.
Presumably, the new employees do not have a “public sector mindset” and neither do the department heads, most of whom have been appointed by the new management.
Whatever Air India’s problems are, they are not a consequence of lazy, old employees. They are a consequence of how the new management is running the airline.
As for the promise held out by the arrival of new aircraft, well, of course, they will make a huge difference. But let’s not forget that we have been here before.
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Will new planes help?
In 2006, when Praful Patel was aviation minister, Air India announced an order for over 60 new jets, 23 of which were different versions of the Boeing 777 and 27 were Boeing Dream Liners. Eighteen Boeing 737s were also part of the deal.
That announcement was greeted with the same kind of excitement that Wilson’s new announcements have now conjured up. And indeed, when the planes arrived, they were amazing. I remember taking the new non-stop service to New York from Mumbai in 2007 and being gobsmacked by how impressive it was.
But the reality is that new planes are not enough. You must have a management that knows how to use the fleet well and how to manage it. Ironically, it is the Boeing 777s that are now Air India’s biggest problem and the subject of the most complaints from passengers who fly them to North America.
Is there much evidence that an influx of new aircraft will bring any drastic change now? We forget that Air India has just had many new aircraft added, as Vistara’s fleet was merged with its own. And frankly, things have not improved because of the additions. In many ways, they’ve gotten worse.
Most full-service airlines the world over, including Air India’s current godfather, Singapore Airlines, make their profits from high-yield passengers—those in first and business class. When Jet Airways operated domestically, one of its claims to fame was the exceptional quality of its business class service. Vistara could not compete effectively in that category and soon reduced the number of business class seats to just two rows, or eight seats in total. Air India, on the other hand, always had more business class seats on most aircraft and was competing with Jet in that category.
Now that both Vistara and Jet are gone, Air India has a monopoly in business class.
So it could make profits by selling lots of high-yield, profit-making business class seats on metro sectors. Instead, it has chosen to abandon its old aircraft and use Vistara planes, with their tiny business class on metro routes.
One argument in favour of the merger is that it allows Air India to offer premium economy, which the Vistara planes have and most Air India planes do not. This may or may not be a valid argument, but the problem is that Air India’s fleet integration with the Vistara aircraft has been somewhat disastrous.
For instance, on many sectors where Air India has sold premium economy seats, it has not been able to use Vistara aircraft and is suddenly switching to planes that have no premium economy. As a result, passengers who have paid for premium economy seats are downgraded at the last moment to economy ones.
I know because when it happened to a member of my family last month, I tweeted about it. I was startled to discover how many people responded to that tweet, describing their own experiences. And the downgrading stories keep coming.
I have lost count of the number of times @airindia has done this to so many passengers?
Why would premium passengers book on @airindia ?
Isn’t it time for Campbell Wilson to actually manage the airline?
Never happened this regularly till @TataCompanies took over pic.twitter.com/sGnXXHhUhu
— vir sanghvi (@virsanghvi) January 18, 2025
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Air India’s downgrading saga
When an airline downgrades a premium passenger, it pays a price in terms of reputation and loyalty. Air India does not care about this. No attempt is made to placate the downgraded passenger. There seem to be no SOPs or policies to handle such situations. The concept of service recovery, essential in the hospitality sector, is unknown to Air India’s top management.
Take the example of my family member. He was downgraded on his way to Bangkok and when he was due to return a few days later, they messaged to tell him he had been downgraded again. One downgrading is understandable, especially when you are dealing with an airline with poor fleet management. But two in the space of a few days is unusual.
It was only after I tweeted about it that somebody from Air India finally called. My relative asked how much it would cost to upgrade to business. The person said he did not know. It was not part of his system. He would have to manually calculate the amount.
An hour later, Air India called back and said he would have to pay an extra Rs 55,000 for an upgrade on the Bangkok to Bombay sector. This was more than the return premium economy fare he had paid. Naturally, he declined.
When it was time to check in at Bangkok airport, he asked at the counter whether it was possible to upgrade. Sure, they told him, it would cost just 4,100 baht (around Rs 10,000) to upgrade to business. He took the upgrade but was left with no goodwill for Air India, an airline that had downgraded him twice and whose staff did not even know how much an upgrade would cost.
This is a relatively minor issue compared to people who have been left stranded because of flight cancellations, who have spent 12 hours on the tarmac on delayed aircraft without food or air conditioning, or whose elderly parents have been mistreated. However, I mention the incident because it offers an insight into Air India’s poor management style and lack of respect for its passengers.
Each week, I wonder about the calibre of people who now manage the airline. This week, for instance, I had a bad experience with the Maharaja Club Frequent Flier programme, where I have been a member of the top tier for decades. Again, it was only after I tweeted about it that Air India conceded it was its fault. (“The issue you experienced was due to a staff error…”) Until you make a fuss, the new Air India does not care. (Though, to be fair, they were gracious and candid about the screw-up in the end.)
Hello @airindia ! What is the point in renaming & publicising your Frequent Flier scheme when it takes so long for refunds & your Customer Care is helpless?
Yet another management failure which won’t get better just because you are buying new planes 😊
— vir sanghvi (@virsanghvi) February 3, 2025
So, I wish Campbell Wilson well. I am told that he is a nice guy who’s doing his best and I hope the airline gets its act together. Many of us have been travelling Air India long before the current management took over and I imagine we will be travelling long after many of the current managers have gone home.
And, let’s give the new management credit for the good things. Both ground handling and inflight service have improved. Air India ground handling is now better than Vistara’s ever was. But let’s stop all this nonsense about “just wait for the new planes” and “public sector mindset”.
Air India has a problem. It should be much better run, now that the political interference has gone. That was the point of privatisation. But there is very little evidence that Air India is better managed now. And certainly, there have been many phases when Air India, pre-privatisation, was far, far better run than it is today.
One of those phases was when JRD Tata ran it. Another was when Ratan Tata was chairman in the late 1980s. Ratan once told me that if the Tatas ever took over Air India, he would complete the job he was unable to do as chairman in the nationalised days.
The Tatas need to make good on that promise. They need to live up to the standards of JRD and Ratan, and not besmirch their memory.
The billions they will spend on Air India will be wasted unless they learn how to manage it better and treat passengers with more efficiency and more respect. Yes, it is a mass transportation business. But it doesn’t have to be a crap airline.
Vir Sanghvi is a print and television journalist, and talk show host. He tweets @virsanghvi. Views are personal.
(Edited by Prasanna Bachchhav)
Even I was treated shabbily by Air India. But The Print would not allow me to write an article on it.
Vir Sanghvi has some special privileges with The Print. Just because some relative of his was downgraded, he wrote an entire article on Air India. And Shekhar Gupta published it too.
Very well written article. The fact is that the airline is trying to bite more than it can chew at the moment by expanding Voraciously and ignoring passenger concerns. It is also being run by a management team which is headed by Leaders who have only low cost airline experience and exposure as they have all been hired from Indigo or scoot . From the time Tatas have taken over the airline, they have enjoyed a monopoly on USA and Canada routes due to the Russia Ukraine war as the airspace remains closed to all the Usa Major airlines. Once this situation ends, then they will face stiff competition. Just blaming the old employees is not a solution but rather an excuse to cover up the blunders the new management team is making. Once Tata house realises this and cleans up this management and gets proper Professionals who have run Major full service airlines, may be things will change for the better.