Air India: After almost 69 years, Air India is once again in Tata’s bag, now the new owner has to face the challenges related to it and the company has to plan to overcome them. These challenges include everything from the aging plane to human resources and everything related to it.
Gustav Baldauf, former COO of Air India, said the biggest challenge is to create a new ‘vision, mission and strategy’ for the group, which will be based on different models, reduction in dabbling routes, services and markets and employees of different groups. Will define a new airline system with
Tata currently has four airlines – Air India, Air India Express, Vistara and AirAsia India. AirAsia India will soon join Air India Express.
Managing Four Airline Brands
“In addition, a new company-wide quality system, the new target, will help sustain different airlines on their vision and mission,” Baldoff said. The Tata group recognizes that business models should not be mixed but it is necessary to cover from charter flights to low cost carriers to full service and cargo services on both domestic and international routes.”
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With the handover, the Tata group now has to manage the four airline brands on a different profile, culture and cost base, says Satyendra Pandey, managing partner at aviation advisory firm AT-TV. “Turning the airline towards profitability is a critical step and requires careful and decisive decisions,” he said.
Payment difference between PSU and private carriers
The former Air India executive said manpower integration across all Tata Group companies is going to be a difficult task and may take a long time. He said, “Productivity parameters can be more performance oriented in private carriers as compared to a PSU. For example, an Air India pilot gets a guaranteed payout of 70 hours even if he flies 40 hours. This cannot happen in the case of Vistara or AirAsia.
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Returns should be reasonable compared to investment
“It is not a matter of managing three airlines, but building and managing a new, bigger and diversified airline that follows a common vision and is a strong new competitor to the Asian region,” says Baldoff.
Even though Tatas don’t have any capital challenges, says Pandey, “the returns should be reasonable compared to the investments.”
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