DELHI – Flag carrier Air India, placed into a restructuring  plan by the government in 2012, is meeting all of its benchmarks up to now and is on target to be a profitable airline by 2020, said Chairman Rohit Nandan at the Star Alliance CEB meeting in Delhi on December 17

Air India's Chairman Rohit Nandan
Air India’s Chairman Rohit Nandan

In return, the government gave the state-owned carrier an equity infusion and paid off 20 years of debt and worked with bankers to create a turnaround plan, said Nandan, adding that the carrier must reach certain efficiencies.

“The restructuring is being overseen by the secretary of civil aviation, under a committee made up of Air India and members from the banking and financial communities,” said Nandan. “We hope to become cash positive by 2018 and profitable by 2020.”

Air India became a full member of the Star Alliance on July 11, 2014, and Nandan said his carrier is already reaping the benefits, adding that membership has improved its brand.  “Our experience with the Star Alliance has been exceptionally good,” he said. “There were alternative [alliances], but we made a conscious decision to join the Star Alliance.”

Nandan acknowledged some concerns expressed about Air India among some alliance members. “The Star Alliance sent its toughest auditor, who stayed for 21 days. I was nervous about what might happen,” he said. “But when they reported back to me, I was proud about their findings and their confidence in Air India. I maybe even blushed.”

The Star Alliance team also worked with Air India on its customer service plan, said Nandan. “Working with Lufthansa Consulting, they found 21 areas on our airline that were lacking that I won’t name,” he said. “But we’ve decided to close the gap on them within the next six months. I’m not saying we’re perfect, but there has already been a change for customers flying the airline, like the service quality, the food and wine and the way air hostesses are assigned their work.”

Managing a Young Fleet

Air India has 113 aircraft in its fleet, with an average age of 8.5 years old, said Nandan, adding that his airline on average has one of the youngest fleets in the world. “We are in the process of retiring our four Boeing 747s, which are currently used only for VIP travel,” he said. “We have 14 Airbus A320s that will be retired and replaced with new planes.”

The airline is looking at ordering A320neos, said Nandan. “We want to move to them by 2017 so we can have a uniform narrowbody fleet,” he said. “We’ve placed an order for five A320ceos. There are no A320neos available before 2017, so we’d have to lease ceos until the neos are available. By the end of 2015, our average fleet age will fall to 5.5 years.”

Nandan was very pleased with the Boeing 787 Dreamliner. “The Dreamliner is the workhorse of our fleet that is very popular with passengers,” he said. “The planes are full and the economics are great. We’ve already replaced our 777s with 787s on flights to Europe except for London Heathrow.”