 "The <i>Maharaja</i> bares its claws")
It all started with a seemingly innocuous hoarding. Air India (AI) put up a banner right behind the IndiGo check-in counter at the airport in Mumbai that said, “Next time fly with Air India and feel the difference.” IndiGo hit back within four days with a placard placed strategically in close vicinity that said: “Yes Air India, there is a difference. Says the Government.” A chart with IndiGo ranked first for on-time performance and last for passenger complaints, with the reverse true for AI, followed.
The numbers were drawn from data put out by the Directorate General of Civil Aviation (DGCA) and hence hit Air India (AI) harder. But unlike the past, the national carrier refused to hold its tongue and hit back in anger. Is the national carrier donning a new set of feathers? And, by pitting itself against low cost carriers is it positioning itself differently from the full-service premium category carrier that it has always been?
Ashwani Lohani, CMD of AI is tight lipped on the billboard war. But he is candid about his desire to bring about a change in AI’s public image. “For long AI has been ridiculed at, pot-shots taken; there was a barrage of negative publicity even for minor aberrations. No more, AI should be seen in a positive light,” Lohani told Business Standard in an interview.
The national carrier is not used to public spats and did not expect a comeback from IndiGo. “This was unwarranted, we did not target IndiGo or any other airline, but they retorted by bringing the government into the picture, we consulted some advertisement guys, they also did not find it in good taste,” said a senior AI official.
Officials say, that is when Lohani stepped in. He wants to make the airline a vibrant workplace, they say. As part of this, he encourages junior employees to come out with innovative ideas. “Brilliant ideas flow from the bottom to the top some of which are efficiently incorporated,” Lohani said. But did the idea for the first ad come from its junior employees? None ventures a guess.
However there is no doubt that AI wants to get its shine back. “The chairman comes from a hospitality background, he knows brand image,” the
AI official said. “He asked the corporate communications team to respond and the result was a billboard screaming: “How do some of our friends react when their passengers discover that we offer more leg space, hot meals and more luggage allowance? ...With INDIGnation!” The message was lost on no one.
Bolder avatar
Lohani refuses to get into the ad war, he would rather focus on the brand’s new found confidence. AI has found its voice in recent months because of “a strong recovery and a firm support from the government,” Lohani says.
In the last financial year the airline clocked an operating profit of Rs 105 crore after successive years of losses. In FY16, the airline cut its losses to Rs 2,636 crore from Rs 5,859 crore in 2014-15. This is the power beneath Air India’s wings, many point out.
However, the numbers need a reality check. The gains are mainly due to low crude prices leading to a saving in the fuel bill of Rs 2,754-crore. “Fuel, of course, helped but I believe the turnaround has been due to efficiency,” says Lohani. The performance got them a mention in the Prime Minister’s Independence Day speech officials point out. “It’s a great honour, a confidence booster, we want to function more like a corporate house,” Lohani says.
While the new numbers signal a turn for the better, a complete turnaround is still a long way away. “Air India is more like an emperor, the emperor without clothes,” says an executive of a private airline.
Price warrior
One of the interesting developments, as reflected in the battle between AI and IndiGo, is a shift in the positioning of the national carrier. The airline with the Maharaja logo was once associated with luxury flying. Time, merger of the domestic and international carriers and a string of controversies have since dimmed the allure. But the recent spat indicates that the airline does not see itself as just a premium category airline, having placed itself in direct competition with low cost fliers.
This is not an easy battle. Against IndiGo’s 40 per cent market share, AI has only 14.6 per cent, an on-time performance of 72 per cent against an industry average of 80 and it leads the chart for passenger complaints. Lohani believes the 40 new airplanes that it plans to induct over the next two years will help regain market share.
“Today we have 55 aircraft and connect 68 domestic destinations, our nearest competitor has 100 aircraft connecting just 38 destinations (IndiGo). With fleet expansion we will have much more coverage and capacity and regain market share,” Lohani says.
It plans fresh orders of 10 Airbus 320 aircraft, in addition to the 30 aircraft from the European plane maker it has placed orders with. On the international front, Air India is adding destinations and increasing the number of flights to a few cities. “If crude price stays comfortable, we are looking at operating profit of Rs 700 crore this fiscal,” says Lohani. That is a whopping seven times of the previous fiscal. “Air India has a major focus on international routes. Unlike many private carriers, we earn two-thirds of our revenue from international business,” Lohani says, taking an obvious dig at IndiGo.
If the war of words is anything to go by, Air India seems to be turning into a feisty brand, not afraid to take on its detractors. Now for the performance to match its words.
WAR OF WORDS
The numbers were drawn from data put out by the Directorate General of Civil Aviation (DGCA) and hence hit Air India (AI) harder. But unlike the past, the national carrier refused to hold its tongue and hit back in anger. Is the national carrier donning a new set of feathers? And, by pitting itself against low cost carriers is it positioning itself differently from the full-service premium category carrier that it has always been?
Ashwani Lohani, CMD of AI is tight lipped on the billboard war. But he is candid about his desire to bring about a change in AI’s public image. “For long AI has been ridiculed at, pot-shots taken; there was a barrage of negative publicity even for minor aberrations. No more, AI should be seen in a positive light,” Lohani told Business Standard in an interview.
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Fighting back
The national carrier is not used to public spats and did not expect a comeback from IndiGo. “This was unwarranted, we did not target IndiGo or any other airline, but they retorted by bringing the government into the picture, we consulted some advertisement guys, they also did not find it in good taste,” said a senior AI official.
Officials say, that is when Lohani stepped in. He wants to make the airline a vibrant workplace, they say. As part of this, he encourages junior employees to come out with innovative ideas. “Brilliant ideas flow from the bottom to the top some of which are efficiently incorporated,” Lohani said. But did the idea for the first ad come from its junior employees? None ventures a guess.
However there is no doubt that AI wants to get its shine back. “The chairman comes from a hospitality background, he knows brand image,” the
AI official said. “He asked the corporate communications team to respond and the result was a billboard screaming: “How do some of our friends react when their passengers discover that we offer more leg space, hot meals and more luggage allowance? ...With INDIGnation!” The message was lost on no one.
Bolder avatar
Lohani refuses to get into the ad war, he would rather focus on the brand’s new found confidence. AI has found its voice in recent months because of “a strong recovery and a firm support from the government,” Lohani says.
In the last financial year the airline clocked an operating profit of Rs 105 crore after successive years of losses. In FY16, the airline cut its losses to Rs 2,636 crore from Rs 5,859 crore in 2014-15. This is the power beneath Air India’s wings, many point out.
However, the numbers need a reality check. The gains are mainly due to low crude prices leading to a saving in the fuel bill of Rs 2,754-crore. “Fuel, of course, helped but I believe the turnaround has been due to efficiency,” says Lohani. The performance got them a mention in the Prime Minister’s Independence Day speech officials point out. “It’s a great honour, a confidence booster, we want to function more like a corporate house,” Lohani says.
While the new numbers signal a turn for the better, a complete turnaround is still a long way away. “Air India is more like an emperor, the emperor without clothes,” says an executive of a private airline.
Price warrior
One of the interesting developments, as reflected in the battle between AI and IndiGo, is a shift in the positioning of the national carrier. The airline with the Maharaja logo was once associated with luxury flying. Time, merger of the domestic and international carriers and a string of controversies have since dimmed the allure. But the recent spat indicates that the airline does not see itself as just a premium category airline, having placed itself in direct competition with low cost fliers.
This is not an easy battle. Against IndiGo’s 40 per cent market share, AI has only 14.6 per cent, an on-time performance of 72 per cent against an industry average of 80 and it leads the chart for passenger complaints. Lohani believes the 40 new airplanes that it plans to induct over the next two years will help regain market share.
“Today we have 55 aircraft and connect 68 domestic destinations, our nearest competitor has 100 aircraft connecting just 38 destinations (IndiGo). With fleet expansion we will have much more coverage and capacity and regain market share,” Lohani says.
It plans fresh orders of 10 Airbus 320 aircraft, in addition to the 30 aircraft from the European plane maker it has placed orders with. On the international front, Air India is adding destinations and increasing the number of flights to a few cities. “If crude price stays comfortable, we are looking at operating profit of Rs 700 crore this fiscal,” says Lohani. That is a whopping seven times of the previous fiscal. “Air India has a major focus on international routes. Unlike many private carriers, we earn two-thirds of our revenue from international business,” Lohani says, taking an obvious dig at IndiGo.
If the war of words is anything to go by, Air India seems to be turning into a feisty brand, not afraid to take on its detractors. Now for the performance to match its words.
WAR OF WORDS
- Air India puts up a banner behind the IndiGo counter; asks fliers to fly Air India and feel the difference
- IndiGo hits back; says yes there is a difference, in service and performance
- Air India steps in with a new ad; says that competitors react to its better leg room, hot meals and luggage conveniences, with 'INDIG'nation