Taxi to Take Off: Air India says Phase 1 of its transformation complete

First phase focused on addressing legacy issues, strengthening fleet, upgrading systems and hiring

Air India on Thursday said it had completed the first phase of its transformation plan, which included measures such as placing a record-setting aircraft order; committing $400 million to refurbish existing aircraft; investing $200 million to upgrade IT systems; restoring in-flight entertainment systems; and hiring 3,800 new employees.

While the transformation plan has been named "Vihaan.AI", Phase One was called "Taxi" since it was about addressing legacy issues of the airline and laying the foundation for future growth, Air India said.

"The conclusion of the first phase also marks the beginning of ‘Take Off’, the second phase of transformation, which is focused on developing the platforms, processes and systems needed to build toward excellence," it added.

After winning the bid for Air India in October 2021, the Tata Group took charge of the airline in January last year.

On the customer side, the airline took various measures during the first phase of transformation: revamping menus on international and domestic routes; launching premium economy seats on long-haul flights; insourcing critical customer service functions; implementing multiple customer compensation policies; and recruiting hundreds of additional airport staff to improve customer experience.

On the employee-front, the airline rolled out a new organisation structure and revamped roles across various levels to address disparities between permanent and full-term contract employees. It also rolled out 29 new policies to improve employee welfare, designed new salary structures for legacy staff, introduced two new upskilling programmes, and hired 3,800 new employees.

On the growth-front, the airline leased 36 aircraft, restored all grounded aircraft, and signed the largest-ever order of 470 planes.

"It attained highest ever single-day passenger revenue, highest ever cargo revenue, highest ever ancillary revenue, and highest ever load factor," it added.

The second phase will also witness the consolidation of the group airlines AirAsia India and Air India Express. "The LCC (low-cost carrier) entity has successfully merged its core reservations platform, websites, and customer-facing systems," it mentioned.

"Vistara will also be merged with Air India following the grant of regulatory approval. The development of a world-class training academy will also take shape as also the future direction and configuration of the airline’s line and base maintenance," it said.

Campbell Wilson, CEO and MD, Air India, said the first six months of the transformation journey had engaged and united Air Indians behind a common cause, and made great strides in tackling many issues that had built up over the years.

During this Taxi phase, we have also come a long way in establishing foundations for growth, he said.

Turnaround: Season 1

For customers: Revamped in-flight menus; launched premium economy seats on long-haul flights; insourced critical customer service functions; put in place customer compensation policies; recruited more airport staff

For employees: Rolled out 29 new employee welfare policies; designed new salary structures for legacy staff; introduced two new upskilling programmes; hired 3,800 new employees

On growth: Leased 36 aircraft; restored all grounded aircraft; signed largest-ever order for 470 planes