Air India CEO Opens Up On Turnaround Plans, Vistara Merger And Modernisation—Exclusive

Air India, the erstwhile national carrier, was taken over by the Tata Group over two years ago in 2022, as the conglomerate added the airline to its existing pack of carriers that comprised Vistara and AirAsia.

"We made no secret of the fact that it was going to be a multiyear program. We said five years. The Economist called this the 'Everest of Corporate Turnarounds' for a reason," he said.

"So many things have happened in the last two years. It is certainly not the finished product. I know that there's a huge amount of expectation and indeed impatience for the future Air India to fully emerge," Wilson added.

In terms of transforming the airline's staff, Wilson said that the average age of employees has been brought down from 54 to 35, and 9,000 new employees have been added.

"We brought four airlines, 140 IT systems, 100 new aircraft, new training academies [and] started a base maintenance facility...That is a credit, I think, not just to the team, but also to aviation ecosystem in India, including the DGCA and the (civil aviation) ministry and others that have enabled this to happen," Wilson said, adding that this kind of transformation in other countries would have required "five to eight years".

Air India, the erstwhile national carrier, was taken over by the Tata Group over two years ago in 2022, as the conglomerate added the airline to its existing pack of carriers that comprised Vistara and AirAsia.

"We made no secret of the fact that it was going to be a multiyear program. We said five years. The Economist called this the 'Everest of Corporate Turnarounds' for a reason," he said.

"So many things have happened in the last two years. It is certainly not the finished product. I know that there's a huge amount of expectation and indeed impatience for the future Air India to fully emerge," Wilson added.

In terms of transforming the airline's staff, Wilson said that the average age of employees has been brought down from 54 to 35, and 9,000 new employees have been added.

"We brought four airlines, 140 IT systems, 100 new aircraft, new training academies [and] started a base maintenance facility...That is a credit, I think, not just to the team, but also to aviation ecosystem in India, including the DGCA and the (civil aviation) ministry and others that have enabled this to happen," Wilson said, adding that this kind of transformation in other countries would have required "five to eight years".

The merger of Vistara into Air India, completed earlier this month, provides an opportunity for the latter's growth to be "catalysed", Wilson said. The amalgamated airline "represents the best of both Vistara and Air India", he added.

Although Vistara was a strong brand in itself, the merger was necessary as the Tata Group had already planned to bring its four airlines under a single entity, he explained.

"It was necessary for many reasons, not least of which, is economies of scale and profitability, and the ability to further grow," the CEO said.

Although the process of merger has been progressive, the airline for now is operating Vistara aircraft with Vistara crew so that the product experience of the customer is something "that is what they expect", he noted. "But progressively, we will bring everything together into a coherent whole. That process will take time."

On the concern expressed by a section of Vistara pilots and crew over the staff policies during the process of amalgamation, Wilson said when two entities merge, they may not pick the best of everything, but neither the worst.

"Now if you look at individual elements, some people can say this is better, some people can say this is worse, but on balance, I'm absolutely convinced that it is better for for each individual group," he said.

Notably, Vistara employees started reporting mass sick leaves in March-April this year, in what was seen as a mark of protest against the new contracts they were being offered due to the merger with Air India. The contracts reduced their guaranteed flying hours from 70 to 40 hours, thereby signalling a pay cut.

Wilson, while touching upon the issues that were required to be addressed, said remuneration was not at at market levels in the group carrier. "There was an absence of due process and performance management."

As part of the modernisation plans, Air India had allocated $400 million towards its retrofit program in 2022, Wilson said. However, supply-related issues led to the delay in its implementation.

The retrofit of Air India's Boeing 787 aircraft is expected to commence in April, and the first set of these aircraft will return to service in October 2025, the CEO explained.

The carrier's Boeing 777 aircraft will go through the retrofit programme next year. The full interior refit is "expected to be completed in 2026", Wilson said.

Air India's plan is to modernise one-third of the airline's wide-body fleet in order to improve customer experience, he pointed out.

The carrier is also in the process of expanding its fleet, which currently stands at 120 planes including 70 wide-body aircraft. The airline is committed to expanding the fleet to 470 aircraft-plus, Wilson said.