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migair54
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How To Recover Air India?

Thu Apr 16, 2015 7:00 am

How to save Air India and transform in a reference??

The middle east airlines have a gold mine in India but Air India is losing more and more money by the day, however with the new PM Modi many things are changing in India.

What do you think are the best ways to transform Air India??

I know that one of the biggest problem in India (and many other countries) is the political interference in the airline. With many non senses to make some people or regions happy.

In my opinion Air India could be a huge airline for the interest of India, with the new dreamliners, B77W, good qualify labour at low cost, huge domestic market and big diaspora always willing to go home for visit and business, big cargo market also with Pharmaceutical companies, IT, manufactures.

AI could increase the Air India Express footprint out of the main hubs DEL and BOM, and reduce the mainline, so reducing the cost to fight better with Indigo, Spicejet and other low cost.

Right now the US3 are having a hard time with ME3, In my point of view Air India could get some profit of this situation if they can get a nice agreement with some of the US3 and start flowing the traffic via AI hubs with the existing US flights or even some other new ones.

But I think the best option for Air India is a bigger partnership with Air Canada, Toronto is a great place for pax to transit to the USA, because transfer can be faster and also India community in Canada is also big, however the last agreement I saw for codeshare flights I found very little and with some non senses.

What are your thoughts for this very very difficult mission?
 
lancelot07
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RE: How To Recover Air India?

Thu Apr 16, 2015 7:03 am

Quoting migair54 (Thread starter):
What do you think are the best ways to transform Air India??

- privatize it
- fire the management and get a new one.
 
TC957
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RE: How To Recover Air India?

Thu Apr 16, 2015 9:14 am

Quoting lancelot07 (Reply 1):
privatize it
- fire the management and get a new one.

That'll be a good start - I'd add remove every nouse of government contact / interference to that.
 
Thomaas
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RE: How To Recover Air India?

Thu Apr 16, 2015 9:22 am

I think that they have a bloated cost structure because they have been government owned and poorly run for such a long time. They do not benefit from the cheap labour available in India. I think AI should focus on a single international hub in DEL and pool all of their resources there. The minute India gets its airport infrastructure and airlines sorted, the ME3's business model will because irrelevant. India in itself not only have significant O&D but is also a great connecting point for SE Asia traffic and the kangaroo route.
 
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LAX772LR
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RE: How To Recover Air India?

Thu Apr 16, 2015 9:33 am

kill it dead, then start from scratch.
I myself, suspect a more prosaic motive... ~Thranduil
 
migair54
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RE: How To Recover Air India?

Thu Apr 16, 2015 11:32 am

Quoting LAX772LR (Reply 4):
kill it dead, then start from scratch.

then we are not recovering but rebuilding it.

Quoting lancelot07 (Reply 1):
- privatize it
- fire the management and get a new one.

I forgot to mention, but that was the first obvious steps, specially the new management.
 
kaitak
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RE: How To Recover Air India?

Thu Apr 16, 2015 11:45 am

Staff buy in will be very important; I can only imagine morale is very low. Focus on this; communicate,. Set out a long term goal. What does AI want to be. If AI wants to be a top class carrier, morale and standards have to improve drastically. Take a leaf out of Gordon Bethune's book. What he did for CO can be applied to AI.
 
theaviator380
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RE: How To Recover Air India?

Thu Apr 16, 2015 1:17 pm

Quoting Thomaas (Reply 3):

Lot of carriers have non stop flights to SE asian countries from EU's main cities, India/AI can provide good service to pax connecting to Aus from EU with transit in either DEL or BOM. AI just need to work how they can attract people transiting thru above 2 airports using their carrier.

They can significantly pull EU pax which are currently traveling on EK, EY, QR transiting through DXB, AUH, DOH respectively. BOM and DEL airport are worldclass now, my recent experience was amazing at BOM airport.

AI have right aircrafts, location is not bad either (geographically), they can pull EU crowd traveling onward to SE asia or Aus.
 
dtw2hyd
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RE: How To Recover Air India?

Thu Apr 16, 2015 1:34 pm

Quoting lancelot07 (Reply 1):
- privatize it

To privatize GoI has to payoff all $8 Billion debt. Getting $8 Billion allotted in one year budget is near impossible.

One may claim, some private entity will take on debt and fix it, not possible in India.

India has to no debt restructuring laws. Without liquidation every last cent of debt will be recovered. Kingfisher has $2.5 Billion debt, it may take 10 years or 20 years but Kingfisher group will end up paying most of it.

Indian has world's cheapest airfares with highest tax and regulatory burden. Not an investor friendly environment. SpiceJet needed a mere $200 Million, it couldn't get until last minute, that also with GoI support.

Quoting lancelot07 (Reply 1):
- fire the management and get a new one.

There is no concept of management for AI, just a puppet of GoI at the helm. AFAIK management changed 4 times in last 7 years. They are hunting for new head for last 10 months.
All posts are just opinions.
 
simairlinenet
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RE: How To Recover Air India?

Thu Apr 16, 2015 1:35 pm

Quote:
How To Recover Air India?

What do you mean, they're already recovering! Rohit Nandan said in an interview with ATW recently that they'll become profitable by 2022 because "that's the plan the government has given us."  
 
bobnwa
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RE: How To Recover Air India?

Thu Apr 16, 2015 1:53 pm

Quoting migair54 (Thread starter):
however with the new PM Modi many things are changing in India.

Hasn't this same statement been written about every new PM for the past 25 or so years? It appears to me that Air India is not capable of being run at a profit and very likely never will be.
 
migair54
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RE: How To Recover Air India?

Thu Apr 16, 2015 1:58 pm

Quoting simairlinenet (Reply 9):
What do you mean, they're already recovering! Rohit Nandan said in an interview with ATW recently that they'll become profitable by 2022 because "that's the plan the government has given us."  

Yes, I didn´t know that, now I think everybody can sleep better because it has been planned and plans always work out...  

I think in the case of India given the huge market and the opportunities in DEL and BOM a dual hub is necessary, giving up any of them would be crazy in my opinion, a very deep market analysis is necessary to find out what route will work better where, for example BHX out of DEL is working but I am not sure if BOM would work so good, and same with some other routes.

Another very important issue I read here not long ago is the taxes for airports and spare parts for planes, I think they are extremely high, I think Indigo take the planes to Sri Lanka and Dubai for maintenance, with such a qualify and cheap labor in India it´s to stupid to give away such a big business.

Quoting kaitak (Reply 6):
Set out a long term goal. What does AI want to be.

Great point, I think they should keep far from people thinking that they can become QR, EY or EK in a couple of years, Actually i think one of the main goals should be the airline of choice for most travellers going to India, transit pax will be important but securing homeland first should be a priority. The image of Air India among the Indians is so bad that very few will choose AI over any other airline.
 
audian
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RE: How To Recover Air India?

Thu Apr 16, 2015 2:39 pm

Here are my points,

1. Hire a sound CEO(not from software or banking but from aviation industry) and build an executive team. Give him some flexibility to hire and fire.

2. As mentioned by others, turn DEL into international hub. Make it a transit airport from Europe. Middle East, Africa to Far East Asia, South East Asia and Australasia.

3. Offer more code share routes to LH in India especially from cities where LH fly.

4. Add non stop flights from DEL to SFO (popular location chosen by the forum members) in addition to EWR and ORD.

5. Expand code shares on UA flights from SFO, EWR and ORD to more US cities such as ATL, DFW, SEA, LAX, SAN, MIA, STL, AUS where the south asian population is relatively high.

6. Improve the soft product.

7. Make transit seem less and avoid longer transit times in DEL.
 
ytz
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RE: How To Recover Air India?

Thu Apr 16, 2015 3:33 pm

PRIVATIZE === PRIVATIZE === PRIVATIZE

That's the only way out. Seriously. There is nothing that can be done, as long as route planning, fleet purchases, and even pax booking (in premium classes) is subject to government interference.

Prior to that, there's a few things to be done:

1) Move VVIP transport duties to the IAF. India is a big enough country that it doesn't need an airline to fly around politicians. The Government of India need to put on their big boy pants and get the IAF dedicated VVIP aircraft and squadrons. This would also remove politicians from special consideration on Air India. Want special treatment? Fly IAF VVIP service.

2) Have the government absorb all the bad balances and pension liabilities at Air India. This is the only way, they will survive as a commercial entity.

3) Build more hubs. No airline can serve all of India with just BOM and DEL. They need a proper southern hub at BLR. This way DEL could be the North American gateway. BLR would become the southeast Asian, Australian and Indian ocean gateway. BOM would be the Middle East and Africa gateway. All three hubs could have varying levels of Gulf and European service.

4) IX ends up with CCJ, TRV and COK as hubs. I'd upgrade IXE and MAA to hubs as well. No tag on flights. They operate o/d from those cities, with a focus on the Gulf, SIN, KUL, etc. All the places where migrant labour travels and where direct flights are advantageous. Flights to BOM, DEL and BLR, would only be to allow them to rotate aircraft through maintenance.

5) Once the hubs are set up, they can really push foreign expansion. From BLR, they should be able to serve every major Australian city daily with a 788 (I mean all of them: PER, ADL, SYD, MEL, BNE)...and AKL as well. And BLR can support a few flights to Europe to get on the Kangaroo route. From DEL, AI could now operate to ORD, IAD, EWR, SFO, YYZ and YVR. All Star hubs in North America. Those 789s coming in, should be optimal. AI needs to work with UA and AC, so the bulk of North American passengers travel those Star gateways to DEL and then on to their final destinations in South Asia (not just India).

6) And once the hubs are setup, they can also expand domestically by buying more large regional aircraft. E195/CS100 sized birds to service mid-sized cities from their hubs.

7) A huge part of the problem is transit hassles at airport. AI needs to improve flight times for connections. No international passenger should be waiting overnight at an airport for a domestic connection. And the airline needs to work with authorities so that domestic and interational are co-located at a single terminal at all their hub airports. Ridiculous that AI and IX are spread out over terminals 1A, 1B and 2 at BOM, for example.
 
RemoFlyer
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RE: How To Recover Air India?

Thu Apr 16, 2015 3:53 pm

Quoting Audian (Reply 12):
2. As mentioned by others, turn DEL into international hub. Make it a transit airport from Europe. Middle East, Africa to Far East Asia, South East Asia and Australasia.

What rational European passenger would want to transit through India to go to Japan/China/Hong Kong/S Korea or Singapore/Bangkok when there are available nonstop flights either on European or Asian carriers or both  

If you do find such an irrational traveler wouldn't they rather transit through DXB DOH or AUH given the first world standard of both the hubs and the primary airlines that operate the hubs

[Edited 2015-04-16 08:53:54]
 
audian
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RE: How To Recover Air India?

Thu Apr 16, 2015 4:06 pm

Quoting RemoFlyer (Reply 14):
What rational European passenger would want to transit through India to go to Japan/China/Hong Kong/S Korea or Singapore/Bangkok when there are available nonstop flights either on European or Asian carriers or both  

If you do find such an irrational traveler wouldn't they rather transit through DXB DOH or AUH given the first world standard of both the hubs and the primary airlines that operate the hubs

"If" Air India offers better prices and best experience one don't need to be rational, just having some common sense works.

Who would ever thought(few years ago) Europeans would prefer DXB/AUH/DOH to SIN or BKK for flights to Australia.

Its just matter of time.

[Edited 2015-04-16 09:07:10]

[Edited 2015-04-16 09:07:29]
 
audian
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RE: How To Recover Air India?

Thu Apr 16, 2015 4:11 pm

Quoting RemoFlyer (Reply 14):
What rational European passenger would want to transit through India to go to Japan/China/Hong Kong/S Korea or Singapore/Bangkok when there are available nonstop flights either on European or Asian carriers or both

There may be ton of airlines between Europe and China. I would agree with you on that.

But how many airlines are flying from African nations to Asia and Australia?
 
dtw2hyd
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RE: How To Recover Air India?

Thu Apr 16, 2015 4:20 pm

Quoting YTZ (Reply 13):
1) Move VVIP transport duties to the IAF

Cost $1.5 Billion. IAF could use that money buy more Rafales.

Quoting YTZ (Reply 13):
3) Build more hubs. No airline can serve all of India with just BOM and DEL.

Actually having two crew bases is main reasons for its bad OTP. DEL is B787 base. BOM is B787 crew base. Every single crew member is repositioned to DEL.

Triangular routes require unnecessary crew stations, unnecessary repositioning and hitting FDTL limits sooner.

Closing Mumbai crew base actually improves performance.

Quoting YTZ (Reply 13):
I'd upgrade IXE and MAA to hubs as well.

MAA has highest fuel tax in the country 30%. It has one runway. AirAsia India moved to BLR for same reasons. Not a good hub location.

Quoting YTZ (Reply 13):
6) And once the hubs are setup, they can also expand domestically by buying more large regional aircraft. E195/CS100 sized birds to service mid-sized cities from their hubs.

Its planning to get 40 x ATR72-600s.

Quoting YTZ (Reply 13):
Ridiculous that AI and IX are spread out over terminals 1A, 1B and 2 at BOM, for example.

Don't know about AIX, AI domestic moving to T2 by the end of this year. So does 9W.

Bottom line AI is doing some of what you suggested, some are not possible. Nothing is going to help until its debt is refinanced.

GoI is not going to absorb AI's debt.
All posts are just opinions.
 
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yyz717
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RE: How To Recover Air India?

Thu Apr 16, 2015 4:25 pm

Quoting YTZ (Reply 13):
PRIVATIZE === PRIVATIZE === PRIVATIZE

That is usually a good solution, but it's highly possible, if not likely, that the Indian government would continue to meddle in AI affairs even if privatized. Perhaps a better solution would be to liquidate AI and let it die a natural death, and let the private sector step in as/when they see fit.

Quoting YTZ (Reply 13):
1) Move VVIP transport duties to the IAF. India is a big enough country that it doesn't need an airline to fly around politicians. The Government of India need to put on their big boy pants and get the IAF dedicated VVIP aircraft and squadrons. This would also remove politicians from special consideration on Air India. Want special treatment? Fly IAF VVIP service.

The problem with transferring VVIP duties to the IAF, is that the Indian government would likely spend a lavish amount on new transport aircraft, something it can ill afford. But this would at least unburden AI.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
CHI787ORD
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RE: How To Recover Air India?

Thu Apr 16, 2015 4:46 pm

Quoting Audian (Reply 12):

7. Make transit seem less and avoid longer transit times in DEL.

This seems to be a big problem still. Why is there a 10 hour layover in DEL when flying ATQ-DEL-ORD?
 
ytz
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RE: How To Recover Air India?

Thu Apr 16, 2015 4:46 pm

Quoting yyz717 (Reply 18):
but it's highly possible, if not likely, that the Indian government would continue to meddle in AI affairs even if privatized.

How exactly? Certainly not more so than say 9W now. For example, how much does the fed here interfere with AC? I'm sure there will be a little bit. But it will be far more limited than what AI faces today because there will be executives who will have to decide if currying more government favour actually has a financial payoff.

Quoting dtw2hyd (Reply 17):
Cost $1.5 Billion. IAF could use that money buy more Rafales.
Quoting yyz717 (Reply 18):
The problem with transferring VVIP duties to the IAF, is that the Indian government would likely spend a lavish amount on new transport aircraft, something it can ill afford. But this would at least unburden AI.

Who said anything about buying? As part of recpaitalizing AI and taking on its, debts, the GoI could simply transfer the required 747s and a few narrowbodies to a new IAF VVIP squadron.

Having a dedicated VVIP unit makes travel expenditure transparent. Just look at the controversies we have here when our generals or ministers use the Challengers. This would happen in India as well if the politicians now had to fly service air. Lots of scrutiny. It's very easy, on the other hand, to get great travel perks (like free J), if you're dealing with AI instead of a defence ministry bureaucrat. The GoI could then move to a normal contracted schedule for traveling commercial air for most government employees.

It should be embarrasing for a country as large as India to have its politicans fly on an airline aircraft. Virtually every developed country has dedicated VVIP transport as a military function. This is done primarily for security reasons. It's not optimal from a security perspective, to not have the flexiblity to deploy an asset at will (for VVIP transport). Operational security is compromised, because the personnel flying and maintaining the aircraft aren't military and may not be bound to the same secrecy requirements. Scheduling may be compromised because uncleared personnel will know when the aircraft is being deployed for VVIP duties. Etc.

The VVIP aircraft also allow the air force flexibility. Here in Canada, our VVIP aircraft are used to move wounded military personnel and their families when not in VVIP service. And second to that, for aeromedevac of ordinary citizens when their movement care is critical. No reason why India couldn't do the same. Ditto for major evacs like we just saw in Yemen.
 
migair54
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RE: How To Recover Air India?

Thu Apr 16, 2015 4:47 pm

Quoting YTZ (Reply 13):
1) Move VVIP transport duties to the IAF. India is a big enough country that it doesn't need an airline to fly around politicians. The Government of India need to put on their big boy pants and get the IAF dedicated VVIP aircraft and squadrons. This would also remove politicians from special consideration on Air India. Want special treatment? Fly IAF VVIP service.

It´s not that necessary, it´s a way to make money if they have spare planes, even the UK uses BA or VS, Kenya uses KQ, Thailand TG, China Air China....

Quoting YTZ (Reply 13):
3) Build more hubs. No airline can serve all of India with just BOM and DEL. They need a proper southern hub at BLR. This way DEL could be the North American gateway. BLR would become the southeast Asian, Australian and Indian ocean gateway. BOM would be the Middle East and Africa gateway. All three hubs could have varying levels of Gulf and European service.

Right now they need to shrink and make sure that whatever they do it´s going to work and not to add more problems, so I don´t think that adding more hubs it´s a good idea right now, slowly maybe in the future, for regional routes, but many long haul will work out of MAA, HYD, CCT or BLR. It´s better to make everything to go via DEL and BOM for long haul to Europe, America and Oceania.

Quoting dtw2hyd (Reply 17):
Its planning to get 40 x ATR72-600s.

Some of them are already in operation for Air India Regional (Alliance Air) to replace very old ATR 42-320, CRJ and B732.

Quoting Audian (Reply 12):
4. Add non stop flights from DEL to SFO (popular location chosen by the forum members) in addition to EWR and ORD.

It´s better to make a good market study than listening to us,   however many times we are right.

Quoting dtw2hyd (Reply 17):
Triangular routes require unnecessary crew stations, unnecessary repositioning and hitting FDTL limits sooner.

Completely useless routes, it´s better to offer DEL-SYD 3 times a week and then DEL-MEL 3 times a week than useless DEL-SYD-MEL-DEL or same with MXP-FCO.... just a waste.

Quoting dtw2hyd (Reply 17):
Actually having two crew bases is main reasons for its bad OTP. DEL is B787 base. BOM is B787 crew base. Every single crew member is repositioned to DEL.

It´s difficult to find a worse way to schedule flights and crews than that, and I´m sure AI management they know, but they don´t care.

Quoting Audian (Reply 12):
1. Hire a sound CEO(not from software or banking but from aviation industry) and build an executive team. Give him some flexibility to hire and fire.

This is one of the main issues from my point of view, many state airlines are afraid of giving freedom/flexibility to CEO and management, they think having an useless puppet will be better, but having a successful airline working for the country is much more important, I think government interest and airline interest can be working together if both sides are ready to collaborate and understand.
 
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yyz717
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RE: How To Recover Air India?

Thu Apr 16, 2015 5:00 pm

Quoting YTZ (Reply 20):
Quoting yyz717 (Reply 18):
but it's highly possible, if not likely, that the Indian government would continue to meddle in AI affairs even if privatized.

How exactly?

The Gof I could privatize AI but impose operational restrictions such as no layoff rules, or required government oversight on route development or hiring.

Quoting YTZ (Reply 20):
how much does the fed here interfere with AC?

Alot, actually. AC is still subject to its privatization act requiring forced biligualism and maintaining the HQ in Montreal (without access to the larger and more dynamic manegement pools in Toronto and Calgary, our 2 largest HQ cities).

Quoting YTZ (Reply 20):
It should be embarrasing for a country as large as India to have its politicans fly on an airline aircraft. Virtually every developed country has dedicated VVIP transport as a military function.

Embarassing, why? Tony Blair used to regularly charter a BA 777 for his offshore forays. Mulroney was known to fly commercial as PM. Far more embarassing to India is the grinding poverty and recent rape culture episodes......
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
dtw2hyd
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RE: How To Recover Air India?

Thu Apr 16, 2015 5:07 pm

Quoting YTZ (Reply 20):
It should be embarrasing for a country as large as India to have its politicans fly on an airline aircraft. Virtually every developed country has dedicated VVIP transport as a military function.

IAF VVIP squadron has

7 x 737s (3 BBJs worth $1 Billion with all bells and whistles)
6 x ERJs
HS748s (I believe they are used for VVIP transport)


If not for bribes scandal they would have had 12 x AW101s. Now setting for Mi-17V5s

So we are talking about transferring long-haul VVIP transport to IAF.

How many time Indian PM/President travels 4+ hour legs. Very few. Spending another $1.5 Billion for WB ULH aircraft sunbathing. IAF will join AI and 9W.
All posts are just opinions.
 
airDFW
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RE: How To Recover Air India?

Thu Apr 16, 2015 5:09 pm

How about making the banks own the company (through a venture), I believe the debt is owned by state owned banks. So they could transfer the debt and shares(?) to a holding company and let that company do the whole running in terms of board, hiring a CEO etc. So that would make it an arms length from GOI.

I also think a southern India base is needed as many of the southern cities do not have direct link to DEL so that would make 2 stops for accessing long haul destinations of AI.
 
ytz
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RE: How To Recover Air India?

Thu Apr 16, 2015 5:09 pm

Quoting migair54 (Reply 21):
It´s not that necessary, it´s a way to make money if they have spare planes, even the UK uses BA or VS, Kenya uses KQ, Thailand TG, China Air China....

The UK maintains VVIP transport squadron and allows VVIPs to travel on commercial air when cost effective, and on personal travel.

This is what India should be doing, instead of letting Indian politicians run roughshod over staff at AI. Getting dedicated VVIP transport is the only way in India to force a separation between politicians and AI. So now, they can't abuse the airline for their personal travels....like the fellow who insisted the airline change equipment on a certain route because he wanted more J seats for a family trip.

Quoting migair54 (Reply 21):

Right now they need to shrink and make sure that whatever they do it´s going to work and not to add more problems, so I don´t think that adding more hubs it´s a good idea right now, slowly maybe in the future, for regional routes, but many long haul will work out of MAA, HYD, CCT or BLR. It´s better to make everything to go via DEL and BOM for long haul to Europe, America and Oceania.

Can they shrink more than they already have? They are a minority in the Indian aviation market now. And we aren't talking about substantial growth. Just some reorganization. Also keep in mind, that not all growth will be organic to their own lift. For example, the oceania hub at BLR, can be fed by LH, LX with AI flying LHR. This all far more optimal than flying 787s on 2-3 hr domestic runs.

Also, in the case of Australia specifically, relocating to BLR from DEL, is a savings of 500-700 miles on most Aussie/Kiwi routes. This would really help with maximizing loads from them. Makes the flights more long-haul than ultra-long haul. It also means that most Indian passengers aren't backtracking. As it stands right now, from anywhere in south of DEL, you are better off flying through SIN for Australia than DEL. How is that sensible?
 
RemoFlyer
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Joined: Wed Apr 01, 2015 10:12 pm

RE: How To Recover Air India?

Thu Apr 16, 2015 5:55 pm

Quoting Audian (Reply 15):
"If" Air India offers better prices and best experience one don't need to be rational, just having some common sense works.

Who would ever thought(few years ago) Europeans would prefer DXB/AUH/DOH to SIN or BKK for flights to Australia.

   right ... the British/German/Chinese/Korean traveler is going to get on an Air India plane, stopover in Delhi and then get on another Air India plane to go to Shanghai/Seoul .... yup I see that happening   

... As for Australia ... now that they prefer DXB etc how the heck is DEL going to persuade them to give that up :O
 
RemoFlyer
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RE: How To Recover Air India?

Thu Apr 16, 2015 6:01 pm

Quoting Audian (Reply 16):
But how many airlines are flying from African nations to Asia and Australia?

You mean there is a market for that - apart from Chinese manufacturers going to oil and gas exploration nations; and everyone going to South Africa ?
 
dtw2hyd
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RE: How To Recover Air India?

Thu Apr 16, 2015 6:15 pm

Quoting AirDFW (Reply 24):
How about making the banks own the company (through a venture), I believe the debt is owned by state owned banks. So they could transfer the debt and shares(?) to a holding company and let that company do the whole running in terms of board, hiring a CEO etc. So that would make it an arms length from GOI.

AFAIK DVB and Investec hold majority of AI debt. State owned banks own less than 10%.

In principle your idea works. Transfer all assets (aviation and real estate) to an entity, could be a state owned bank or start an aviation leasing company. To make this leasing company better, include 9W/EY with their sunbathing wide bodes and SpiceJet's Q400s.

AI's 8 x WBs
9W's 10 x WBs
SG's 15 x Q400s

AI should not own any assets, just leasing from that leasing company and pay lease.
Cut off all GoI financial support to AI.

Lease out or sell those surplus with EY's help.
All posts are just opinions.
 
audian
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RE: How To Recover Air India?

Thu Apr 16, 2015 6:24 pm

Quoting RemoFlyer (Reply 26):
... As for Australia ... now that they prefer DXB etc how the heck is DEL going to persuade them to give that up :O

Persuading DXB and winning is not my statement. I didn't mentioned that.

I mentioned a possibility or an potential opportunity for Air India to expand. DXB is not a holy place for aviation and its not written anywhere that all passengers from Europe has to transit through DXB. Geographically DEL share the same advantage as DXB does. More over travelling on Star Alliance flight can earn more miles they can use on other carriers.
All passengers care is value for money. If DEL and AI can show that they can ditch the middle east hubs.
 
RemoFlyer
Posts: 176
Joined: Wed Apr 01, 2015 10:12 pm

RE: How To Recover Air India?

Thu Apr 16, 2015 6:32 pm

Quoting Audian (Reply 29):
All passengers care is value for money. If DEL and AI can show that they can ditch the middle east hubs.

Isnt that called persuading them .. how exactly is AI or DEL going to convince passengers to quit transiting through one of three state of the art hub airports, stop flying one of three state of the art airliners ... and throw in their lot and money with AI and DEL ... there has to be some significant extra value that AI and DEL offer ... for the life of me I can't see the value
 
audian
Posts: 178
Joined: Thu Apr 09, 2015 2:05 pm

RE: How To Recover Air India?

Thu Apr 16, 2015 6:36 pm

Quoting RemoFlyer (Reply 30):
Isnt that called persuading them .. how exactly is AI or DEL going to convince passengers to quit transiting through one of three state of the art hub airports, stop flying one of three state of the art airliners ... and throw in their lot and money with AI and DEL ... there has to be some significant extra value that AI and DEL offer ... for the life of me I can't see the value

That's whats the whole thread is about . How can they come back?

It's not about current situation. If its about current situation, I will agree with you.
 
DIJKKIJK
Posts: 1874
Joined: Sun Jul 27, 2003 11:03 pm

RE: How To Recover Air India?

Thu Apr 16, 2015 7:50 pm

I hate to say this but a part of the problem is the very fact that the airline is headquartered in DEL.

The sloth, corruption and the generally unprofessional employee culture in that city simply beggars belief. They should have never moved away from BOM, which is a better and more efficient than Delhi in every particular.
Never argue with idiots. They will bring you down to their level, and beat you with experience.
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: How To Recover Air India?

Thu Apr 16, 2015 8:34 pm

Quoting RemoFlyer (Reply 30):
how exactly is AI or DEL going to convince passengers to quit transiting through one of three state of the art hub airports,

The same way IST is doing it. By offering a real destination.

Will DEL beat out DXB, AUH and DOH, every time? Most certainly not. But it has it's own o/d and can attract lots of pax who might now consider DEL as a stopover.

I remain convinced that BLR is a better Australasian hub. It's more of "half-way" point from Europe to Aus. It's a major financial/technological hub in its own right. And the city is a little less chaotic than DEL. And they don't have an airport that risks getting fogged in.

Ultimately though, serving the Kangaroo route is well down on the list. Operating to Australia is about serving the Indian diaspora living there and catering to Indians who want to travel there. AI does not need sixth freedom traffic to be a successful carrier. There's enough homegrown O/D for several airlines to do well in India.

What's disgraceful at the moment is the use of the 788s on domestic runs, when AI should be expanding abroad. Flights been hubs and focus cities should have more frequencies and large narrowbodies (321s and 739s), with the 788s flying international flights. That's a change they don't need privatization for.

Quoting DIJKKIJK (Reply 32):
I hate to say this but a part of the problem is the very fact that the airline is headquartered in DEL.

DEL is a better location for a major hub though. And if you're a state-owned enterprise, one would assume, that you would be co-located with the HQ of your major sponsor.
 
RemoFlyer
Posts: 176
Joined: Wed Apr 01, 2015 10:12 pm

RE: How To Recover Air India?

Thu Apr 16, 2015 9:41 pm

Quoting YTZ (Reply 33):
The same way IST is doing it. By offering a real destination.

so now DEL has to beat out not only DXB DOH and AUH ... but also a top rated tourist destination like IST (even though the current airport is a hellhole)

...seems like the solution got a little bit remoter
 
dtw2hyd
Posts: 8615
Joined: Wed Jan 09, 2013 12:11 pm

RE: How To Recover Air India?

Thu Apr 16, 2015 9:42 pm

Quoting DIJKKIJK (Reply 32):
The sloth, corruption and the generally unprofessional employee culture in that city simply beggars belief. They should have never moved away from BOM, which is a better and more efficient than Delhi in every particular.

I tend to disagree with this. That is the tagline of anti-merger crowd.

Imagine if AI and IA never merged. IA would be in much better position. It would have purchased more narrow bodies and capture more domestic market share.

All the current debt post-merger AI holding is related to surplus Wide Body purchases, which would have been on pre-merger AI books.

Because of surplus WBs and their debt, NB purchases were deferred and lost domestic market share.

Imagine if AI is split-up in to two companies today, international carrier will end up with majority of the debt with less revenue. It will sink itself rather quickly.

Narrow Bodies are working hard to keep company afloat. 26 year old A320 busy bee is like a retiree grandpa working at Walmart to support slacker able body young grandson (B77L)
All posts are just opinions.
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: How To Recover Air India?

Thu Apr 16, 2015 9:46 pm

Quoting RemoFlyer (Reply 34):
so now DEL has to beat out not only DXB DOH and AUH ... but also a top rated tourist destination like IST (even though the current airport is a hellhole)

...seems like the solution got a little bit remoter

Like I said, AI has zero need to cater to the Kangaroo route to be profitable. If they do get traffic, it will be incidental, like TK getting a boost from those who want a stop in IST (just live I've done on my trips to India with TK).

AI's redemption comes from not losing Indian o/d to the ME3 and EU3. It does not come from chasing lower yielding Kangaroo route traffic.
 
rlwynn
Posts: 1512
Joined: Fri Dec 15, 2000 3:35 am

RE: How To Recover Air India?

Thu Apr 16, 2015 10:10 pm

Really, there is nothing to do. It is India. India is not seemingly capable of doing business in this style. It is just the culture.
I can drive faster than you
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: How To Recover Air India?

Thu Apr 16, 2015 10:29 pm

Quoting rlwynn (Reply 37):
Really, there is nothing to do. It is India. India is not seemingly capable of doing business in this style. It is just the culture.

Nonsense. India has generated a few world-class multi-nationals. And it even has a great airline (9W). Its aviation sector is simply hobbled by government mismanagement.
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: How To Recover Air India?

Thu Apr 16, 2015 10:30 pm

I still think the AI brand is worth something. But it would need privatization and management like they've never seen to make it a strong, competitive and profitable airline.
 
Gr8Circle
Posts: 2638
Joined: Fri Dec 02, 2005 11:44 am

RE: How To Recover Air India?

Thu Apr 16, 2015 11:29 pm

Quoting bobnwa (Reply 10):
It appears to me that Air India is not capable of being run at a profit and very likely never will be.

Any company can be turned round and made profitable if the right steps are taken.....AI was profitable up to the 1980s even as a govt owned airline, because there was a capable person at t he top....the founder JRD Tata, who was a private sector business baron himself......

Quoting rlwynn (Reply 37):
Really, there is nothing to do. It is India. India is not seemingly capable of doing business in this style. It is just the culture

You don't know much about India do you? Start reading some news outside of Europe for a change.....the country whose flag you sport has dozens of successful companies operating in India for last several decades......many of them in partnership with local India companies.....
 
LFutia
Posts: 3159
Joined: Sun Dec 08, 2002 11:04 am

RE: How To Recover Air India?

Thu Apr 16, 2015 11:35 pm

Let them fail and dissapear.

Leo/ORD
Leo/ORD
 
AT
Posts: 905
Joined: Tue Jul 25, 2000 12:16 pm

RE: How To Recover Air India?

Thu Apr 16, 2015 11:44 pm

Talking of Air India, what about the other airlines in the subcontinent, which are (broadly speaking) confronted with the same geopolitical issues: PIA and Biman are as, if not more, a mess; Sri Lankan seems to be much more stable.
Didn't Emirates have a controlling stake in SriLankan for many years ? And can that be attributed to their relative prosperity? Granted Sri Lanka is way smaller a country than Indian or Pakistan.
 
User avatar
lightsaber
Moderator
Posts: 20953
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RE: How To Recover Air India?

Fri Apr 17, 2015 2:59 am

It would take gutting AI to reform it enough.

Quoting lancelot07 (Reply 1):
- privatize it
- fire the management and get a new one.

3. Reduce staff to nominal level
4. Improve service
5. Reduce aviation taxes in India
6. Law change to allow new style combined international/domestic terminals to aid tranfsers.
7. Allow AI to bid out maintenance on a bidding basis, including outside of India.

Not likely to happen, so we'll have AI threads for years to come.   

Quoting Audian (Reply 12):
2. As mentioned by others, turn DEL into international hub. Make it a transit airport from Europe. Middle East, Africa to Far East Asia, South East Asia and Australasia.

I would like that, but tax and the GoI processes discourage turning DEL in a world class hub that could compete with the ME3.

Quoting DIJKKIJK (Reply 32):
The sloth, corruption and the generally unprofessional employee culture in that city simply beggars belief. They should have never moved away from BOM, which is a better and more efficient than Delhi in every particular.

Interesting perspective. But what has been done is done. The omelette cannot be unscrambled.

Quoting YTZ (Reply 33):
Ultimately though, serving the Kangaroo route is well down on the list. Operating to Australia is about serving the Indian diaspora living there and catering to Indians who want to travel there. AI does not need sixth freedom traffic to be a successful carrier. There's enough homegrown O/D for several airlines to do well in India.

So far, load factors are too low to support your statement. AI must have transfer passengers (most likely to Europe) to fill the plane enough to make a profit.

Lightsaber
I cannot wait to get vaccinated to live again! Warning: I simulated that it takes 50%+ vaccinated to protect the vaccinated and 75%+ vaccinated to protect the vac-hesitant.
 
navcad92f14d
Posts: 52
Joined: Mon Feb 02, 2015 4:11 am

RE: How To Recover Air India?

Fri Apr 17, 2015 3:20 am

Perhaps it would be best to let it fail. I thought the same when UAL was bankrupt after 911.
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: How To Recover Air India?

Fri Apr 17, 2015 4:04 am

Quoting lightsaber (Reply 43):
So far, load factors are too low to support your statement. AI must have transfer passengers (most likely to Europe) to fill the plane enough to make a profit.

Load factors from AI or as a whole on these sectors?

If it's AI, it's understandable why the loads are low. And a reformed airline should do better.
 
rajrs
Posts: 38
Joined: Fri Aug 03, 2007 8:06 pm

RE: How To Recover Air India?

Fri Apr 17, 2015 7:01 am

First , on Immediate basis Air India should start extensive codeshare partnership with American carrier i.e. UA & branding, marketing of all these codshare routes.
Air India should start atleast one Africa route which will have connections throughout the Africa.
 
dtw2hyd
Posts: 8615
Joined: Wed Jan 09, 2013 12:11 pm

RE: How To Recover Air India?

Fri Apr 17, 2015 11:05 am

Quoting lightsaber (Reply 43):
3. Reduce staff to nominal level

I know you keep repeating this on every thread without evidence, logic or reason behind it.

AI Airline (AI,AIX,Regional) has total of 13000 employees for 130 aircraft
Pilots 1470 (200 short)
FAs 2500 (800 short)
Support staff 8000 ($250/month low level employees)
Roster averages 55 hrs/month under DGCA


EK Airline has total 40000 employees for 200+
Pilots 3,700
FA's 19,000
Support staff 16,000
Roster averages 90+hrs/month under GCAA

EK has to recruit 11000 (5000 FAs) this year because of its abnormal attrition rate to keep its staffing levels.
All posts are just opinions.
 
migair54
Topic Author
Posts: 2458
Joined: Thu Jun 14, 2007 4:24 am

RE: How To Recover Air India?

Fri Apr 17, 2015 11:15 am

Quoting YTZ (Reply 38):
Nonsense. India has generated a few world-class multi-nationals. And it even has a great airline (9W). Its aviation sector is simply hobbled by government mismanagement.

It has, and the young population with a lot of bright future and ideas, the potential of India is one of the biggest in the world but the politics are not up to the required level, if you drive in Gurgaon you can see that India a booming place with infinite potential.

Quoting rajrs (Reply 46):
First , on Immediate basis Air India should start extensive codeshare partnership with American carrier i.e. SA)">UA & branding, marketing of all these codshare routes.
Air India should start atleast one Africa route which will have connections throughout the Africa.

Yes, I agree with you, I think AI should use the USA routes much better and Canada also, Flying to ORD, EWR, YYZ, with that they can offer almost any USA destination to any India and many south east Asia in 2 stops, but they have to work on it to make it much better, establish a nice banking system to allow the best of connectivity and attract many pax with nice and easy transfer and short timings.
I think the transfer pax to south east Asia and Australia will be a bonus if they do things properly, however the real business here is attracting the local market, business travellers and cargo.

The African route could be ADD in partnership with ET, to offer plenty of destinations beyond ADD, complementing the existing ADD-DEL ET route, the same way Air China is going to do. JNB could work because of the big India population in SA but right now SA is very close to EY, so I am not sure if they will be ready to collaborate.
 
dtw2hyd
Posts: 8615
Joined: Wed Jan 09, 2013 12:11 pm

RE: How To Recover Air India?

Fri Apr 17, 2015 12:14 pm

Quoting lightsaber (Reply 43):
5. Reduce aviation taxes in India

Very unlikely, states would not agree or states want feds to compensate for their loss.

Do you think State of Tamil Nadu will let go 34% tax on aviation fuel?

Quoting lightsaber (Reply 43):
6. Law change to allow new style combined international/domestic terminals to aid tranfsers.

Integrated terminals are coming online. Visa less transfer need to be addressed.

Quoting lightsaber (Reply 43):
7. Allow AI to bid out maintenance on a bidding basis, including outside of India.

Not in next 100 years. Actually one state in India working on bringing back Indigo MRO work to India.

Airbus increasing its investments from $400 Million to $2 Billion in India. Modi toured Airbus Toulouse plant last week. I am bit worried about these developments and impact on Boeing.

http://www.youtube.com/watch?v=PRlEitxD5zU

When India sees GE, its thoughts are about How can we lure GE to build a turbine for our next Aircraft Carrier.
When it sees Boeing/Airbus How can I lure them to sell/build advanced weapon systems?

GoI doesn't care if Boeing doesn't supply parts for B787s or GE90 has an IFSDs every week. These doesn't even show up on their radar.
All posts are just opinions.

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