The chief executive of Air India has pledged to restore national pride in the country’s flag carrier after it entered “terminal decline” following seven decades of state ownership.
Campbell Wilson, a New Zealander, said Air India had received “no investment in aircraft, in people or in technology” under its state owners, who had brought the airline to its knees by the time it was sold to Tata Group, the owner of Jaguar Land Rover.
Mr Wilson said: “There were 30 planes on the ground because there was no money for spare parts, so there were too many staff for the size of the airline, which bred inefficiency and complacency.
“No new non-flying staff had been recruited since 1999, so the average employee age was 54 with a retirement age of 58. There were no job descriptions, no metrics, no reward for good performance and no consequences for bad performance.
“Promotion was based on tenure, not talent. There was no revenue management. In short, it was the antithesis of what you want from a modern business. It was in terminal decline.”
Mr Wilson, who spent a year playing hockey in Kidderminster before deciding on a career in aviation, said Air India’s challenges were having a deadening effect on the country’s wider aviation market.
As a “state-owned behemoth” not expected to turn a profit, it acted as “a spoiler in the system,” stymying the development of would-be rivals unable to survive in its shadow, he said.
Mr Wilson added: “You had a lot of small airlines which were subscale, undercapitalised and didn’t have the strength to withstand the natural ups and downs. The market was value-destroying, just stuttering along.”
Wilson, 53, said a succession of Indian governments also failed to grasp the fact that air travel could play a central role in promoting prosperity and social advancement.
He said: “It was considered the preserve of the rich, not something that was a driver of economic development. But now it’s very much seen as a catalyst for growth.”
In 2017, Narendra Modi, then in his first term as prime minister and setting out a programme of privatisation and economic liberalisation, stated it was his ambition for the average Indian to be able to fly.
Mr Modi gave the go ahead for Air India to be sold in the same year, leading to its purchase by Tata for $2.3 billion (NZ$3.8b) at the end of 2021. Mr Wilson was chosen by the industrial conglomerate to head the airline the following May.
For Tata, the takeover was driven as much by emotion as cold business logic, with the carrier’s precursor having been founded in 1932 by J.R.D. Tata, India’s first commercial pilot.
While the purchase of JLR from Ford for $2.2b in 2008 was regarded as a gamble, the takeover of Air India was freighted with far more reputational risk in a country where the carrier had hitherto been regarded as something close to a national embarrassment.
As a corporate juggernaut with a million employees and listed units worth about the same as the GDP of Denmark, Mr Wilson said Tata “has its business expectations”.
He added: “This is more than a financial venture. Restoring national pride in the airline is a personal mission. Within India there’s huge visibility. People are excited. They want to see Air India succeed and they want everything to happen quickly.”
Every one of the 100 or so Tata Sons companies – which range from Tata Steel and JLR parent Tata Motors to the Indian Hotels chain that owns the luxurious Raj-period Taj Mahal Palace in Mumbai – has been tasked with assisting the modernisation drive, Mr Wilson said.
Creaking IT systems have been upgraded, 63 offices reduced to a single campus and 9,000 employees hired, with 3,000 legacy staff let go. A new training centre and a flight school with 30 planes have opened, while work is beginning on a state-of-the-art maintenance facility.
Backed by Tata’s might, Air India last year placed the world’s largest-ever aircraft order, purchasing 470 Airbus and Boeing aircraft worth a record $70b (NZ$116b).
Accounting for retired planes, that should swell the fleet from 255 jets now to more than 600. Around 70 planes have already been delivered or restored to active service, with a new one arriving every six days.
The influx will add vital capacity, with India’s 1.4b population served by just 700 aircraft across the entire industry, fewer than at United Airlines alone. The planes will fly from airports that are also increasingly privately-run and which have doubled in number in eight years.
Air India’s transformation will be capped this autumn with the consolidation of the group’s four airlines into two. A pair of low-cost units, regarded as essential in a country where the bulk of even long-distance journeys are made by bus or train, will combine, while Air India itself will absorb Vistara, a full-service joint venture between Tata and Singapore airlines.
The transactions will leave Air India 75% owned by Tata, with Singapore Airlines holding the rest.
It was the latter company that provided Mr Wilson with a way into aviation in 1996. After his hockey-playing stint in the Midlands and a tour of Europe and the US in a camper van, he faced a reluctant return home in order to finally embark on a career.
Mr Wilson said: “I’d seen the world and I didn’t really want to go. But Singapore Airlines wanted a management trainee in Auckland and said there’d be an opportunity to relocate to anywhere they flew. They sent me to Sydney, then Singapore, Canada, Hong Kong and Japan.”
In 2011, Mr Wilson was chosen to set up Singapore Air’s discount operator Scoot, which later formed a blueprint for Vistara and ultimately led Tata to choose him to helm Air India.
“When the opportunity at Air India came my way it seemed like the most exciting aviation job on the planet, though not necessarily the easiest,” he said. “But I thought, why not try?”
In addition to Tata, there is also pressure from the Modi government to succeed. With India now the most populous nation on earth and increasingly assertive on the world stage, having a functional airline has become a national imperative.
Mr Wilson said: “The opportunity is massive. There’s a huge population, a huge market, India is becoming a central point in the global supply chain. It’s in the top five with respect to GDP. There’s a global diaspora of 30m people to serve. So there are many winds at our back.”
China provides a guide to just how big Air India could get, Mr Wilson said. Having exhibited the same propensity for travel that India does today some 20 years ago, the figure for China is now 10 times higher, suggesting the airline could become “very, very large, very quickly”, he added.
With the building blocks in place, the biggest obstacle to Mr Wilson securing what he called a seat for Air India at aviation’s “top table” is the dominance of travel to and from the subcontinent by the Persian Gulf’s super-carriers.
Emirates, the world’s biggest long-haul airline, has been dubbed India’s de facto national airline, flying from 10 cities in the country to its Dubai hub, from where people can reach close to 150 onward destinations in 80 countries.
Mr Wilson said he envisages a scenario in which high-paying customers are won over by the convenience of using an expanded Air India network, leaving “more price sensitive traffic that is prepared to schlep through a Middle East airport at 2am” to the likes of Emirates.
He said: “Being able to fly non-stop on a home brand that speaks Hindi, or whichever regional language you wish, and serves good Indian food will bring over people who wouldn’t previously have considered Air India because of product quality and connectivity.”
Mr Wilson pointed to spending on advertising aimed at India by the Gulf carriers as indicative of their concern. Air India could even turn the tables, he argued, building Delhi into a global hub, backed by a domestic market that its Middle Eastern rivals could only dream of.
Mr Wilson admitted to having been somewhat perturbed when, a couple of months after taking over as Air India boss, he saw the airline described as “the Everest of corporate turnarounds” in The Economist.
But then he reasoned that, in Sir Edmund Hillary, the world’s highest peak had been conquered by one of his countrymen.
He said: “I’m a New Zealander. It’s in my DNA.”
-By Christopher Jasper, Transport Industry Editor, Daily Telegraph UK
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