Six months under Tata Group, Air India stabilising

The OTP ranking have been dominated by AirAsia for the past three months, having achieved figures of 94.8% in April, 90.8% in May and 89.8% in June.

Six months under Tata Group, Air India stabilising
On the in-flight experience, web check in etc, experiences vary if one goes by social media comments. (PTI)

After six months in the Tata Group, which took over the carrier in late January, Air India may not be flying high. However, the airline’s operations appear to be stabilising amidst competition from well entrenched low-cost carriers.

Air India’s market share remains at below the pre-Covid levels of 12.7% in the January-March quarter of CY2019 and 13.4% during April-June period of the same calendar. In 2022, the airline’s share in the January-March quarter was 9.9% and it fell to 7.5% during the April-June period.

IndiGo, the country’s largest carrier had a market share of 53.8% during January-March quarter and 56.3% in April-June. To be fair, the comparison may not be justified given IndiGo is a low-cost carrier. Moreover, the Tatas have had just six months to revamp Air India. Further,  the total air traffic in the country hit near pre-Covid levels only in May. 

Tata Sons appointed Campbell Wilson as the MD & CEO of Air India in May and Wilson received security clearance from the home ministry last week only.

However, on the on-time performance (OTP) front, Air India could have done better. Among the top six domestic carriers, Air India has languished in the bottom half during each month of CY2022 at four metro airports: Delhi, Mumbai, Bengaluru and Hyderabad.

Its OTP stood at 92.9% in January, 89.8% in February, 91.2% in March, 81.8% in April, 81% in May and 83.1% in June. The OTP ranking have been dominated by AirAsia for the past three months, having achieved figures of 94.8% in April, 90.8% in May and 89.8% in June.

Analysts pointed out it could take time to set right certain legacy issues, so one needs to give more time to the airline. Further, the market leader, IndiGo is also not a top performer on OTP, which it used to be before the pandemic.

Air India operates on a hub-and-spoke model, so a delay on one flight has an effect on others. Further, the carrier relies on third party ground handling agencies at quite a few airports, which means it does not have full control of all the factors.

In terms of the passenger load factor, some improvement was witnessed in February and March when it reached 84.1% and 85%, respectively. However, it hovered in the range of 75.4% to 80.5% during the next three months.

On the in-flight experience, web check in etc, experiences vary if one goes by social media comments.

“The progress has been fairly stable in the sense that Air India is a very large organisation and it will take the Tata Group some time to get their arms all around it. But from what we have seen, there is a conscious effort to improve the product and network,” said Mark D Martin, member of Royal Aeronautical Society United Kingdom (MRAeS) and  founder & CEO, Martin Consulting. The airline is in the right direction, but it has a long way to go, he added.

Martin said it will take the new CEO some time to understand Air India’s functioning. He also noted that the carrier has some challenges like realigning its global network, and fleet induction and modernisation.

“It (Air India) needs to get newer and more reliable aircraft and freshen up the entire product offering. It has taken steps through the A350. However, this will take time as the manufacturer can’t give you an aircraft overnight,” Martin pointed out.

Air India is planning to strengthen its fleet with Airbus A350 wide-bodied aircraft. Besides, it is also in talks with Airbus and Boeing for narrow-bodied aircraft. At present, the carrier’s fleet comprises 128 aircraft, including Boeing’s 777-200LR, 777-300ER and 787-800 Dreamliner models, and 319, 320, 320Neo and 321 models of Airbus. However, it issued a tender on Wednesday to sell three 777-200LR aircraft.

“Air India will not be a domestic airline. Although it will have a domestic product service, the bigger game plan would be to look at a global network. The reason being the airline would want to focus on earning revenues in dollar rather than rupee,” Martin said.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Photos