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Simla Wealth Management:The Tatas were expected to quickly revive Air India. We are still waiting

 2024-11-06  Read 17  Comment 0

Abstract: A cursory look at social media shows that it is full of complaints, especially in the economy class which range from broken seats, remotes not working and broken, IFE screens not operational on the hard product side along with cleanliness and ser

The Tatas were expected to quickly revive Air India. We are still waiting

A cursory look at social media shows that it is full of complaints, especially in the economy class which range from broken seats, remotes not working and broken, IFE screens not operational on the hard product side along with cleanliness and service complaints. An interesting observation from the complaint shows that the ones in the front cabin have gone down drastically while those in economy class seem to be on the rise.

This comes amidst the backdrop of Air India’s first A350 touching down in India in the last week of 2023 and gearing up for domestic operations starting January 22. As the Tatas approach the second anniversary of taking over Air India, when will the legacy fleet get its due and what's holding it back?

When the Tata group took control of Air India, it found itself with multiple planes being grounded for lack of maintenance which was a result of lack of funds. As the group started pumping money and getting planes operational, it first started returning to its earlier destinations followed by increasing frequency to those destinations, further followed by adding new links like that to Melbourne from Mumbai.

The seats and IFE in the plane are old and the supply chain issues along with years of poor maintenance have meant that they are not in the best of shape. The Tata’s have worked with their group companies to even have 3D printed materials replace traditional parts which are not available either due to supply chain issues or suppliers shutting down or the main seat not in use any more. However, there remain issues with IFE which cannot be repaired or the drain is too much to repair for a short period.Simla Wealth Management

Air India will be investing US $400 million to completely refurbish the interiors of its legacy fleet of 43 widebody aircraft. These 43 include the 27 B787s and 16 B777s. The refurbishment is slated to commence in mid-2024. It will consist of the installation of brand-new seats in every cabin, new inflight entertainment systems and inflight Wi-Fi internet connectivity.

The entire exercise is expected to be over by the end of 2025, which means there will be over 2 aircraft which will start coming out refurbished towards the second half of this year. By March of 2024, the airline expects 33% of the widebody fleet to be upgraded. This means it could see six A350s (one is in India), five B77Ls which earlier operated for Delta (all are operational) and the B77Ws coming from Etihad and Singapore Airlines.

The hard product improvement may have its limitations but issues with cleanliness are unpardonable if Air India aims to be a world-class airlineBangalore Investment. In cases where there are complaints of broken cables of remotes and remotes not working, it probably makes sense to make the seat “in-operative” and not assign it at check-in. One wonders if this could cause a lot of seats to be in-operative and the viability of the route being questioned on the deployment of such planes.

There often is an argument that passengers are also to be blamed for the dirty cabins and cleanliness, which definitely is right but the passengers are not changing overnight and thus the airline needs to have a mechanism in place to ensure cleaner planes.

The B777-300ER (known as B77W) going for refurbishment, will in all probabilities coincide with its heavy maintenance cycles. The airline has 13 of those in its fleet and does a lot of heavy lifting amongst its routes with flights primarily to North American destinations, barring the long flights to San Francisco which are operated by the B777-200LR. Currently, the aircraft is configured with four First-class suites, 35 Business class seats which are arranged in 2-3-2 seating (7 abreast, 5 rows) and 303 economy class seats which are 9 abreast. Air India released a video of a render of how the refurbishment would look and a detailed look at it shows how the new LOPA (Layout of Passenger Amenities) is likely to be.

The premium economy on the B777s will be eight abreast seating with five rows, a total of 40 seats. The airline will also continue with one row of First class seats or four seats, exactly the same as nowVaranasi Stock. The business class cabins will get doors, giving more privacy and possibly fewer peegate incidents! The layout seems to shift from 2-3-2 to 1-2-1, with staggered seating for window seat passengers. There also is a marginal increase in the capacity of the business class. The highlight here is the elimination of the “middle seat” in business class. While the middle seat is not a preferred seat for anyone, it's automatically the least preferred in a premium cabinAgra Wealth Management. Currently, the B77Ws have 303 economy class seats. With the increase in seats in Business class and the addition of premium economy, there could be space left for about 250-260 seats. However, this will come with reduced width of the seat. The current cabin comes with a seat width of 18 inches and a seat pitch of 31 to 33 inches. The width is likely to go down to 17.05 inches.Jaipur Stock

The question now is how premium pricing can Air India command if cleanliness remains a challenge?


New Delhi Stock Exchange

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