Govindraj Ethiraj: Will the 777 change A-I's fortunes?

DOUBLE EDGE

I was among a handful of journalists who got through to Yogesh C Deveshwar a day after he stunned industry and government alike by resigning as chairman and managing director of Air-India. This was  in February 1994, three years after he joined from ITC. 

The civil aviation minister at the time was Ghulam Nabi Azad, who I will always remember as the man who put Air-India's recalcitrant unions in their place. I don't know what he did 'in-camera' but I was present at a public meeting where he gave them the tongue-lashing of their lives. Coincidentally or otherwise, there have been only one or two cases of industrial unrest since that day. 

The general conclusion was that Deveshwar had a face-off with Azad, else why would he chuck up something as plum as an Air-India chairmanship and head back to the private sector. When put that premise, Deveshwar insisted otherwise. "Why can't you believe that the opportunity at ITC might be more exciting ?" he asked me, in frustration and then by way of a passing quip, "By the way, the salary there is much higher !" 

I've always wondered where Air-India would be had Deveshwar continued for another five years or so. Fact is that little has happened at Air-India while ITC invested in new businesses, scaled up existing ones and exited some. Notably, it embarked on a completely new agribusiness initiative, the eChoupal.

Last week, Air-India launched its first non-stop Mumbai-New York service with a Boeing 777 Long Range (LR) aircraft. Despite all the fanfare accompanying the arrival of the 777, the first flight took only 80 passengers against a capacity of 238. Airline executives I spoke to were quick to point out that by the weekend almost all first-class seats were sold, stressing the word "sold" when quizzed again.

If you were curious about the Deveshwar connection, it's the Boeing 777. The first proposal for a Medium-Capacity Long-Range aircraft (MCLR) was mooted in YC Deveshwar's tenure or thereabouts. Deveshwar or not, it's taken roughly 15 years for Air-India to get its hands on a truly world-class product.

Which is not to say A-I did not acquire aircraft in the interim""there were a handful of Boeing 747s that came in, starting 1994. But they added to capacity in terms of seats, seat configurations and routes but did not offer anything distinctive. Largely, A-I has struggled as a product and brand all these years.

While the struggle might well continue, specifically given its ownership structure and generally given that the market is only becoming competitive, there could be some hope in the new 777. The question is whether Air-India can use the 777 to lift itself out of the external perception morass it's in? Second, can this product change the way its own people think, act and serve?

The external battle is tough. I personally stopped flying Air-India seven years ago after a disastrous experience. And it was not even as drastic as the really drastic ones that someone you know must have been through. This could range from a tire burst to some serious albeit inexplicable technical glitch grounding the aircraft and leaving passengers stranded. Obviously with no options. It happened last week to a friend in Kolkata just in case you wanted a recent example.

It might be no less challenging internally. The biggest "Doubting Thomases" are within the company. Most Air-Indians I have met gave up on their organisation a long time ago. Once upon a time, being national carrier and all that, it mattered to everyone that Air-India had a problem. Today, with private airlines already flying international routes on the east and beginning to stretch to the west, Air-India's woes will matter less and less.

Air-India obviously recognises all this. The airline wants to use the 777 as an opportunity that goes beyond just a new route launch. The product as a whole, by the airline's own admission, is superior to its existing offerings. That's a deliberate strategy. So is the price, though holding it might be tough.

Air-India is also trying to trigger small service-level changes""like creating a "flight manager", an engineer who is responsible for everything on the airline, from upholstery to the smooth functioning of the in-flight entertainment system. The cabin crew and airport check-in staff have gone through fresh training, in an attempt to create a fresher product experience.

It's a little early to predict the outcome but activity has surely picked up. Another 777 long-range aircraft will join the fleet on August 22. In all, A-I has 68 aircraft coming in till 2011. These include 23 777s and 27 Boeing 787 Dreamliners and 18 smaller aircraft for the low-fare Air-India Express. If these aircraft arrive on schedule and perk up the fleet and indeed its people, then Air-India just might have something going for it.

If that happens, even in some small way, it would be really the first time in more than a decade and a half that the airline would have stuck its head out in a marketplace crawling with competition, both from domestic and international players""though the real prodding may have come more from domestic rather than international players.

Assuming the internal and external perception of Air-India does grow, there will be that little hitch that the airline will have to resolve at some point""that of market-based compensation and thus, the best talent. As Deveshwar said, "Why can't someone move for a better salary!"