Air India, led by Tata Group and its long-awaited turnaround plan, suffered a major setback following the deadly crash on AI171 that claimed the lives of all 242 passengers on board, except for one.
This accident has attracted global attention, prompted an investigation by the regulatory authorities, and threatens to undermine efforts of national carriers to modernize their operations and restore its image after many years in decline.
Air India has suffered for many years.
Air India, once the pride of India’s aviation industry has been struggling with inefficiency and poor service since the early 2000s.
The merger of Indian Airlines with British Airways in 2007 led to a shambles that resulted in operational chaos, labour disputes and an erosion of the market share.
For survival, the airline was heavily dependent on bailouts from government.
The Indian government spent billions on the airline between 2012 and 2020 but failed to stop the bleeding.
Tata Sons will take control of Air India by 2022. By then, Air India’s share in the market had fallen to 12%. The airline’s brand was in a state of disrepair, and its morale also suffered.
Tata Group comes up with revival plan
Tata Group purchased Air India for Rs 18,000 crore ($2.4 billion) in January 2022, marking its return to the original founders of the airline after almost seven decades under state control.
Takeover widely viewed as critical for struggling airline
Tata Group announced a plan in 2012 to revive the airline. This included a major fleet modernization program, an improvement to customer service and a plan to combine its four brands — Air India Express (Air India), Vistara and AirAsia India – into two units that focus on low-cost and full-service travel.
Tata Airlines’ commitment to build a global airline that can compete with the giants of aviation was demonstrated by a $70 billion contract for 470 Airbus and Boeing aircraft, one of largest deals in aviation history.
Air India has also made significant investments in its digital platforms and operations on the ground, as well as its interiors. It has also undertaken aggressive recruitment and training efforts.
Early signs of improvement have been visible in recent months.
Customer complaints decreased, while brand perception improved.
The losses in 2023-24 were down 61%, to Rs 44.4 billion.
Analysts predicted that Air India would be able to regain profitability in five years with continued efforts and gain a greater presence on international routes
This crash could have serious consequences
Air India’s reputation could suffer a severe blow despite the fact that investigators are still trying to determine the exact cause of the accident. There is also no evidence that maintenance or operational failures were involved.
The crash has already led to a flood of complaints from passengers.
The financial impact of the accident — including potential insurance claims and payouts to families affected — may strain an airline with a tight budget.
Mark Martin of Martin Consulting said that Air India had focused more on its new brand than on core issues such as broken seats or maintenance practices in a Friday interview with Bloomberg TV.
He said that these issues “should’ve been the priorities.”
The Directorate General of Civil Aviation, India’s aviation regulator, ordered Air India on Friday to perform additional maintenance measures immediately for its Boeing 787-8/9 fleet equipped with General Electric GEnx engine.
The closure of Pakistani airspace has compounded the problems.
Other challenges continue to mount.
Due to the continued closing of Pakistani airspace for Indian airlines, long-haul flights have been extended and costs increased.
Air India’s CEO Campbell Wilson admitted earlier this month that these constraints were a hindrance to its return to profitability.
Tata Group is facing a crucial moment as the investigation unfolds into the accident.
In recorded remarks, CEO Campbell Wilson stated: “This is an extremely difficult day for us all at Air India.”
He said, “Our focus is now on our passengers’, crewmembers’, and their loved ones needs.”
Not only will regulators be watching closely, but so too will the flying public around the world.
The next steps could be crucial for an airline that wants to take back its position on the global stage.
Can the Air India Ahmedabad crash derail Air India’s turbulent revival? This post may change as new information unfolds
