Air India chief Rajiv Bansal eyes profit before divestment

Air India made a loss of Rs 3,643 cr on a revenue of Rs 20,613 cr in the financial year 2016-17

Higher revenue, healthy profit, on-time flights and better connect with the fliers are among the top goals for Rajiv Bansal, who took over as Air India’s chairman and managing director last week, as the state-owned airline goes for privatisation.

“I have a very basic target — to run the airline profitably,’’ Bansal told Business Standard in an interview. The airline can be run efficiently only with the ‘’help of my colleagues”, he said.

Air India made a loss of Rs 3,643 crore on a revenue of Rs 20,613 crore in the financial year 2016-17.

In fact, Bansal wants to bring automation to the airline’s revenue management process. “I want to bring in technological improvement and induct world-class software, which will give us the opportunity for better yield management,” he said. For the process, the airline has floated a tender and has also got response from three global companies. Revenue management gives control back to the airlines so that they can provide passengers in real time the differentiated and personalised offers they want. To be successful, airlines must implement modern commerce capabilities based on real-time dynamic pricing, he said.

The airline simultaneously wants to cut down its losses by hiving off non-core assets like its real estate properties before going down the hammer. It is e-auctioning 41 apartments in Mumbai in the first phase of its property sale and 12 in other cities in the second phase. Total property to be sold in the second tranche includes 35 residential flats and land banks. “We expect around Rs 10,000 crore from the sale; whatever money comes from the asset will go towards reducing the debt of the airline,” he said, adding that his mandate is to sell the airline as a going concern.

Improving the airline’s on-time performance (OTP) will be a high priority for the new chairman. According to the latest DGCA (Directorate General of Civil Aviation) data, Air India had OTP of 65 per cent while market leader IndiGo managed 84.6 per cent. “I have made it clear that we want to best the match in the industry in terms of punctuality,” he said. In a recent communication, he has asked the airline to ensure that the first flight of the day from hubs like Delhi and Mumbai should close their doors 10 minutes before departure time to ensure punctuality. Failing to do so will require the crew to submit a report on why it could not be done. “If we can ensure the first flight on time, it helps us to stick to our schedule and maintain a better OTP,” Bansal said. He’s set to meet the airline staff in airports across the country.

The new chairman also wants to promote the airline’s web-based booking channel among customers. “There will be a lot of activities to let the customer know the benefit of a web-based booking system; it’s a mutual benefit; it helps the airline to reduce expense on travel agent and get a lot of data and allows the passenger to enjoy many benefits, which may not be available if booked through an external agent,” Bansal said.

Currently, the airline gets almost 85 per cent of its bookings through external agents like online travel portals or travel agents. “We want our bookings through our own window,” Bansal said. Also, he’s talking about improving the parameters of customer experience to better connect with them. Air India had recently faced flak for removing non-vegetarian food from domestic flights and has the highest number of passenger complaints, according to latest DGCA data. “We certainly have to improve on that,” promised Bansal.