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In September 2022, months after the Tata Group took over control of Air India, the airline announced a five-year transformation plan named Vihaan.AI. The plan talked about the transformation from fleet to product, adding places and people to fix a jig-saw that was being touted as the largest turnaround in the history of aviation. As the airline clocked a loss of over Rs 22,000 crore, the Tata Group chairman, Natarajan Chandrasekaran, said that the turnaround is not a job of a few quarters but is a five- to ten-year journey.
The comments, part of Tata Sons’ annual report, finally recognises the time needed for a turnaround and indicates how possibly the airline and the group went in without understanding the ecosystem and looking at the job holistically.
Equity partner Singapore Airlines Group declared its Q1-FY27 results on July 28, and it showed that the Air India Group has closed the quarter with a loss of over Rs 1200 crore.
Course correction
When the airline announced its new branding and record-booking aircraft orders, it felt like the airline had a plan in place to revamp things fast. However, ordering planes and making announcements were the easiest of tasks, with the ground situation vastly different. The supply chain constraints meant that the planes were not getting delivered as fast as they were planned to be delivered, while the condition of the planes under the government wasn’t up to the mark for a global brand.
Coming out of the pandemic, the airline took to expanding across routes. Even as it launched more routes, merged Vistara with itself, and added flights and destinations, the legacy widebody interiors were the Achilles heel and remain so even today.
The common traveler had elevated hopes for an instant shift in service and product from the Tata group. While this speaks volumes about the group and people’s expectations from the group, the repeated announcements on timelines that were not met and experiences that were not matched by the product led to disappointment amongst people. Timelines for much publicised refurbishment and the start of the aviation academy were not met, and in one case, like the induction of B777s from Singapore Airlines, the planes never came.
For an airline that is not listed, it would make sense to let the actions speak and have the transformation talk rather than announcements, which are not met. The fatal crash of AI 171 last year in Ahmedabad, the cause of which is still under investigation, was a major nail that hit the turnaround plan. Not only did it derail the confidence of passengers, the airline had to scale down its operations, both domestic and international.
Significant drop in international operations
The airline group saw 20 per cent lower capacity by ASK in January 2026, compared to the previous year. It is also seeing a reduced deployment across geographies in the current times when oil is at elevated levels due to the ongoing conflict in West Asia. The airline has suspended operations at a handful of stations like Chicago, Shanghai, and Male, while significantly reducing its international offerings across large parts of its network.
This shows the pressure the airline has faced after record losses and a drop in revenue over the previous year, even as it consolidates to take on the competition after actively swapping routes with subsidiary Air India Express, especially to the Gulf region.
A decade for transformation or more?
Over the next four years, the airline will see many new aircraft being inducted, both widebody and narrowbody, the transformation of its legacy widebody fleet, and possible retirement of its older generation aircraft, giving profitability a boost. When the group bid, won and took over the airline; Ukraine and Russia were not at war, ships were traversing Hormuz without being challenged and the world was coming out of the pandemic with renewed hope.
Four years of the Russia-Ukraine war, five months of the West Asia conflict, and the geopolitical tensions between India and Pakistan leading to airspace closures have impacted the airline more than anything else. The closed airspaces lead to longer flight times and the need for technical halts.
The group now looks well aligned to the task at hand and that would help the morale of the employees as well as set expectations for the customers and public at large, who have been rooting for the turnaround under the Tata’s, to look for an airline which is world class but Indian at heart. It would then boil down to only two things, investments and returns on those investments.
How much more is needed to be pumped into the airline, with questions being raised by investors of Singapore Airlines as well, which is a 25.1 per cent equity partner in India, and the returns that it would generate. While it may take a decade to turnaround, can it generate enough profits to recover the investments of ten years and future investments?
Ameya Joshi is an aviation analyst.
