2023-09-25 23:30:00
Campbell Wilson who took charge as Air India’s chief executive officer last year is spearheading the transformation of Tata Group-owned airline. In an interaction with businesslinehe shared views on the airline’s growth plans and industry health. Edited excerpts:
What is your views on the current health of the Indian aviation industry? Are we moving towards a duopoly?
The evidence is that over the last few years it has not been a healthy. Industry-we’ve seen many airlines come and some struggle and some go. That is a process that many countries around the world have gone through where we see fragmentation give way to consolidation. We’re now seeing a consolidation with the emergence of two significantly well capitalized and well supported airlines in India. Well, I wouldn’t say that (we’re moving towards a duopoly) but we’re seeing consolidation.
Any thoughts on the overall regulatory and policy environment, what more can the Govt do to boost growth?
We have to give credit where credit’s due. Privatising Air India was a necessary step, Udaan scheme which gives a great incubation for underpenetrated routes as well as airport infrastructure. Another area that has seen work is fuel prices; both in terms of the taxes as well as the benchmarking fuel price once morest international benchmarks for more transparency. However, we’re not there yet with respect to taxes on fuel from all the states. Another thing that needs working is the international traffic rights. Besides this, there is a scope of expansion on Digi Yatra and other similar technologies.
Under Vihaan, you had announced a target of 30% market share by 2027. The Group is already at 25%. Can the target be achieved by 2025?
It depends on the number of aircraft we add and how well we fill them so I can’t put a timeline on that. Having said that, we will evolve the aspiration if we achieve certain milestones earlier than expected.
IndiGo is rapidly expanding in tier 2 markets to have a robust network. How does the airline plan to compete with that?
We need to do the same. As we get incremental aircraft. We need to expand in terms of length and breath in a way which can support connectivity and distribution between the full service and the low cost carrier both domestically as well as internationally to expand seamless connectivity.
Do you see an opportunity to have this hub in the east or south?
There is a case for both domestic as well as international but more for the south side at the moment. We have added Bangalore San Francisco flights recently, and we are adding more flights from Bangalore, we see a good opportunity there. We want to add more capacity from Hyderabad, Goa and others.
Air India has earlier said it will increase its cargo capacity by 300 per cent. How do you plan to do it?
The main driver of growth will be addition of wide body aircraft. Each Boeing 777 aircraft can take around 20 tonnes of air freight and so that’s a huge expansion of capacity. We will consider all options for increasing capacity and connectivity but it will be primarily come from aircraft addition. Given that short batches of widebodies will go for refit next year, there will be a short term reduction in capacity but from a long term perspective there is no impact. We will also explore partnerships.
What was the idea behind setting up a leasing unit in the Gift City?
Gift City is an effective and efficient vehicle to bring aircraft into India. Our participation in Gift City is to support the national ambition of creating aircraft leasing and financing ecosystems in India. Historically Ireland has been a key location for that. We are happy to play our part to bring that closer home.
Are all the aircraft likely to come through GIFT City?
To the extent that we’re entering into leases of aircraft that’s likely the way.
In July, you met Apple and Stanford University executives to explore synergies. What is the update on that?
They had an interesting conversation on revenue management and market segmentation, but it’s a matter of year or two when we see manifestation and outcomes of that. With Apple, we have an existing relationship, our ipads come from there, we are using a software that they have developed and is pertinent to us. The user interface design experience for staff as well as customers, so it’s a mutually beneficial relationship.
Is the company planning to add more of its lounges?
We are exploring the addition of more lounges.
Will tariffs rise amid higher fuel prices at the cusp of the festive season?
Rising fuel prices are not good for aviation players or consumers because ultimately the cost has to be recovered where we are striving hard to put extra capacity on frequented routes and hopefully with that supply into to the market and we can keep airfares to a level that people are comfortable with at the same time which allow us to recover our costs.
Do you see possibility of Air India Express moving operations to second airports like Mopa or Jewar?
There are a lot of dynamics we need to consider here. One is the cost of operating at the airport, the catchment area and effect on network. If you have two airlines operating at different airports ability to connect passengers between two airlines will be hampered. So what is the optimal outcome will depend upon what kind of airline you are. There is no one size fits all answer.
IndiGo has already has moved its operations to Mopa airport in Goa. Do you see opportunity to compete with IndiGo at Mopa at a low cost level?
We have also moved our Goa-London flight to Mopa airport. Air India Express is the airline which most directly competes with IndiGo and it will do whatever is required to remain competitive.
Published on September 26, 2023
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