Last call for Air India to board global turf wars

Tata Sons has asked Air India to aggressively pursue growth on international routes and intensify competition with foreign carriers, especially after becoming a bigger entity following the merger with Vistara. Its low-cost arm, Air India Express, will meanwhile sharpen focus on domestic market, competing with local airlines such as market leader IndiGo, people said.

The Air India board met on Tuesday in New Delhi to deliberate on future plans and align them with the Tata Group's strategic goals in the aviation business, the people said. Towards this, Air India CEO Campbell Wilson stepped down as Air India Express chairman on Tuesday, handing over the role to Nipun Aggarwal, the airline's chief commercial officer.

Also, Basil Kwauk, the newly appointed chief operations officer of Air India, has been inducted to the board.

Basil, a former Singapore Airlines executive, is an old Vistara hand, instrumental in expanding operations of the erstwhile airline joint venture of Tata Sons and SIA.

After the merger of Vistara with Air India, it was felt that there is a need for better synergy at the group level for achieving operational profitability, the people said. Parent Tata Sons is also understood to have stressed upon the Air India management on achieving operational breakeven by FY27-end.

Top officials close to the development said operations at Air India Express have been largely streamlined and can be handled by Aggarwal, seen as an expert in commercial roles. Aggarwal is already a board member in Air India Express and closely aligned with daily operations.

"Both Air India and Air India Express need full attention at this point of time. While Wilson will be able to focus his complete energies on making Air India globally competitive, the plan is to make Air India Express a strong No 2 challenging IndiGo. After Vistara's merger, the plan is to quickly seize international networks, which are also hugely profitable," one of the officials said.

Since acquiring Air India in January 2022, Tatas have moved to consolidate the airline business with Air India absorbing Vistara, and AirAsia India merging with Air India Express for the budget airline operations.

Air India Express has grown at a faster pace since the acquisition, adding 45 aircraft so far.

Aggarwal, who led Tata Sons' move to acquire Air India and a record 470 aircraft order in 2023, is known to be a hard taskmaster. He is currently leading the extensive activity of synergising Air India's network with Air India Express.

"Air India will focus on building strong international hubs, with Air India Express feeding these hubs. We have and will be segregating markets where each airline will operate to reduce overlap," Aggarwal had told ET in January.

While Tatas carry on the long-drawn transformation of Air India including refurbishing older planes, ordering new aircraft, and manpower restructuring, they continue to face criticism from flyers, especially over poor condition of some of the older planes.

"It's not an easy task to manage transformation and a merger at the same time and while the group acknowledges the expectations from the Tata name, the task is gigantic in proportion, but we have had visible success in many areas," an official said.