A mid-air misadventure

The more things change, the more they stay the same at AirAsia India

So what if things continue in their usual dull manner at the Tata group’s airline foray with Singapore airlines, Vistara? Slow and steady, hardly any staff changes and plenty of planned losses. There’s never a dull moment at the group’s second aviation venture in India — AirAsia India.

The latest is a series of resignations at senior levels at the airline. A few weeks ago the rumour mill had it that one of the top officials of the airline had been caught in a not-so-official position with a female co-worker while at work (a company spokesperson offered “no comment” when asked) and the incident had been reported to AirAsia Berhard founder Tony Fernandes, who chose to shoot the messenger, resulting in the resignation of the head of human resources at the carrier. In addition to the head of human resources, the airline also bid goodbye to its head of security, head of engineering and head of ancillary revenue and cargo, among a few others.

In June 2014 itself, when the airline took to the skies, it was off to a rocky start. In the first year, the airline managed to make quite a mess of its operations. To cite just one instance of how haphazard things were, AirAsia India is the only airline in India I can think of that managed to change hubs even before it took to the skies. It first announced Chennai but changed its hub to Bengaluru even before it launched — which, of course, was a better choice and an obvious one in the first place. 

In the first year itself, many flights were introduced and withdrawn. Flight timing were, quite often, absurd. It announced ambitious expansion plans but failed to ramp up its fleet as envisaged. Losses totted up quickly and investors were forced to inject more equity earlier than anticipated. The airline had trouble retaining key people and most industry people I know treated it — and still do — as a sort of stop-gap arrangement while they looked for something more stable.

In August 2015, however, matters came to a head when certain financial irregularities were uncovered, leading to the resignation of its start-up CFO. The ripples of the financial troubles led to a full-fledged change in the team in March 2016, including a replacement of its rock star-like CEO who proved as poor as his words by yet another trusted aide of Fernandes, the second CEO to be put in charge with no experience in the airline sector. To everyone’s surprise, Fernandes had a full new team on board (a CEO, CCO and CFO) with very little collective airline experience.

But here we are, over one year later, and very little seems to have changed at the airline. In addition to the latest spate of exits, the airline’s operations seem as haphazard as before. With 12 aircraft and 1,540 employees (Vistara has just over 1,600 employees with 16 aircraft), it flies to 16 destinations. Instead of consolidating operations from one base, the airline has three hubs — Bengaluru, Delhi and now Kolkata. Instead of trying to increase frequencies on a particular route and thereby establish itself as a key player on that route, the airline is offering a host of single flights a day to various destinations. It plans to add a new aircraft next month and new flights on routes like Bhuvaneswar-Ranchi and Hyderabad-Ranchi, choices that appear quite random and bizarre to anyone who knows the Indian airspace. 

If choice of routes is odd, so are timings. The airline offers a connection from Bangalore to Delhi at 11:50 pm, a flight that reaches Delhi at 2:30 am. There’s a connection from Kolkata via Ranchi to Delhi at 4:45 a.m. The airline's losses continue to mount at a time when most rivals are making money for a change. A senior board member told me that the Tata’s exposure to the airline was already causing them some alarm and he didn’t think the group had a huge appetite left to invest further in the carrier.

This brings me to my final point on the whole AirAsia misadventure so far. As I see it, not only is it a huge wasted opportunity, it is one that is very difficult to comprehend. AirAsia India, in terms of timing, couldn’t have asked for it to be better — the timing of its launch coincided with the fall of SpiceJet. The latter was tottering under the Maran stewardship and the space it vacated could easily have been filled by a new, more nimble rival. 

But what is perhaps even more galling — and hard to comprehend — is the fact that AirAsia India had everything on a platter thanks to its parent. Be it manuals, systems, procedures, experience, training assistance or even uniforms, it only had to pick up the ball and run. Instead it stumbled.