The transformation of Air India—it is now of course a Tata product—is one of the most talked about aspects of international aviation. It is a huge transformation process, one that's going to take several years and is far from being done. Along with new acquisitions, there have been new challenges as well, and a lot of that is something which the airline is dealing with. There are new fleet acquisitions taking place, there is a new culture in place at Air India as well. They've got a transformation program called Vihaan AI. To tell us a little bit about that, we've got the CEO and MD of Air India. Thank you very much, Mr. Wilson, for being with us. I spoke to you a couple of years back. It is an interesting time when it comes to Vistara and Air India integrating—they're now entirely integrated. But there are those who say that Vistara was a wonderful product, it had a wonderful reputation, and therefore is the legacy of Vistara not being diluted?
Well, I think more to the point is that Vistara now allows Air India the opportunity to be catalyzed and the transformation accelerated, and a new airline which represents the best of both Vistara and the legacy of Air India to be born. It was always part of the plan to bring the four Tata airlines together. It was necessary for many reasons, not least of which is economies of scale and profitability and the ability to further grow, and to build an Air India that represents the India that people expect to see around the world, and an airline that reflects the warmth and hospitality of India. So it's been a big project, it's been a long project, but I think the team has worked very hard and it's nice to have the merger phase of that behind us.
Would you say the merger is actually behind you? Because there are crews who are different, with different work cultures—whether it's cabin crew or flight crew. Coming in, has that been a challenge in terms of adaptation or bringing together different work cultures?
Well, we've spent two years in the preparation and execution of this merger—aligning all of the operating procedures, the regulatory compliances and manuals, the IT systems, the terms and conditions of employment, now the physical locations. So it's not as if it's happened all at once overnight—it's been a very progressive process. But yes, for the moment we are operating Vistara aircraft with Vistara crew so that the product experience of the customer is something that is what they expect. But progressively we will bring everything together into a coherent whole. That process will take time. One of the reasons that we've actually held back a little bit on the Air India culture development program is because we wanted the people from Vistara and AirAsia and Express to be part of co-creating it so they feel that they have ownership in it. And so that's going to be something we evolve into in 2025—uniting the organization behind the common mission of the Air India Group. And I think people are bought into it anyway. It's the national name, it's a 93-year-old airline, it's an airline that's growing massively with plenty of opportunity. So I think we have the right ingredients, we just need to bring them together.
Yet you did have some problems—for example, cabin crew decided that at one stage on Air India Express they wouldn't fly, hundreds of flights got cancelled. You had problems with pilots in Vistara saying they have problems as well. You had hundreds of flight cancellations on both airlines. Was that a huge challenge for you in the year that's gone by?
Well, I think put it in context. There's 30,000 employees in the new Air India Group. There were actually five groups of employees because the Indian Airlines-Air India merger was never fully consummated, and so we had to bring all of this together. In the global context, airline mergers can take five to seven years. This has been done in a little over two. And when you bring different employee groups, different terms and conditions together, you don't pick the best of everything, but neither do you pick the worst. So there is a mix of pluses and minuses. If you look at individual elements, some people can say this is better, some people can say this is worse, but on balance I'm absolutely convinced that it is better for each individual group. And more so, the opportunity available to people is much, much greater than it was ever before, simply by virtue of the fact that we've got so many aircraft, there is such ambition to grow, there's such ambition to improve the product, that the opportunity for personal and career development is unparalleled.
And yet there are problems—social media, which I know has been a bit of a nightmare for all airlines. When you've got flight crew complaining or cabin crew complaining and saying this is a broken aircraft—there have been some Facebook posts of late, and that it's deeply problematic, they aren't serving even a proper glass of water. You're a forward-facing industry and a public-facing one at that. When you have challenges like that from your own staff, does it not represent a huge challenge?
Well, our cabin crew and staff want to operate a product that they are proud of, that allows them to provide the service that they want to provide. And it's fair to say that particularly the legacy aircraft that we inherited were not up to that standard. And it just takes a long time. We committed $400 million to buy the seats to refurbish those aircraft. The seats have been in the certification and manufacturing process since then. They will start to be installed on the widebody aircraft next year. About a third of the narrowbody fleet are already done, but it will take a while to bring the legacy aircraft up to that standard. Having said that, we've got a third of the widebody fleet either brand new in the case of the A350s or modern interiors with the 777s, and those have a fantastic customer experience.
I'll talk about that in a moment, but I just want to speak a little bit more about the culture. The reason I say that is because passengers often write into us and say the flight's delayed. We had the former Finance Minister, we had Adnan Sami day before yesterday with certain flight complaints—and I know it's true of all airlines, it's not just Air India by any means. But I sense that people are impatient for better results—more on-time performance, better service on board, better food on board. I know what Air India will ultimately look like, but how would you address the present concerns of passengers?
Well, I think I point to a couple of key facts, or three. One, Air India was the most punctual airline in the country in September and October. Two, the A350, which is flying to Heathrow and to New York, has an NPS of 70 as judged by customers. Our domestic operation has an NPS of 40, which is the same as Vistara was. So I think yes, there's always going to be outliers, there's always going to be events that we regret or that we don't handle well, but we carry 60 million people a year across the group, we operate more than 1,200 flights every day. It is a mass transportation business, and unfortunately there are occasions where it's not perfect. But we're progressively getting better, and I think if you look particularly at the NPS, the customers themselves are saying that we're getting significantly better. It's just that we have to be more consistent and continue that process, because I'm as impatient as anyone of improving this to the level that meets customer expectations all the time.
Air India used to be fairly heavily unionized. Large corporates have problems with unions for various reasons, and I'm not getting into the merits of unions themselves. But when the problem with Air India Express arose, and there were certain unions representing cabin crew, it would have clashed with the corporate values of Air India and what you personally felt was required to enhance efficiency. Was that again a challenge for you in dealing with unions, which has been a part of the culture of this airline?
Irrespective of unionization or not, what was the root cause of people's concern? And that's been something we've been looking at across this whole transformation program. There were work practices, there was absence of job descriptions in the erstwhile Air India, there was absence of due process and performance management, the remuneration wasn't at market levels, the benefits weren't at market levels, certainly the promotion and progression opportunities, the training—all of these were not at what we felt was necessary. And we've invested in and improved all of those. Now, are there areas where people think we should go further? By all means, that's a discussion to have. But I think over the last couple of years, the employee proposition at the Air India Group and particularly the opportunity looking forward is a light-year shift. And so we're committed to making Air India a place that people want to work, people want to stay, and people want to build a career.
There was a concern which turned up in the media—flight crew on long-haul flights saying that the number of hours they rest compulsorily might result in reduced salaries. Is that true?
I'm not entirely sure of the commentary you're talking about. It was something which was apparently raised to the DGCA by Air India, as I understand it. So I think there is a discussion on the flight time limitations that the DGCA oversee, and there's obviously different perspectives. India doesn't yet adopt what is an international standard of fatigue risk management system, which is a much more data-driven, sophisticated approach to managing fatigue risk. It's still quite prescriptive with hard lines. And so I think the discussion you might be referring to was about how should India align with international best practice and what are the pros and cons of doing so. Beyond that, I wasn't present so I don't really know.
Let's talk a little bit about what we started to speak about—the refurbishment of the fleet, because I think that is the biggest demand of passengers, and I think there's a lot of merit in that. Even on your long-haul aircraft, the product is old, it's damaged inside. It's not your fault per se—it's just an industry lack of availability of components for refurbishment. What is the status of that?
Well, as I say, one-third of the widebody fleet is now modernized, either with new aircraft or aircraft with modern interiors that we've leased. And they're probably the ones that the customer is most concerned about because they're in it for longer. As I say, we committed $400 million to the new seats in 2022 and chose the seats, and since then have been working to certify and have them produced and ultimately installed. Two different seat suppliers—reflecting just the nature of the post-COVID supply chain—came to us and said the dates we committed to deliver we can no longer meet. There's going to be a delay of, in one case, six months and one case a little bit longer. And so a retrofit program that was going to have already started in the case of both our 787s and our 777s is now pushed into starting in 2025. It's frustrating. Unfortunately, it is what it is. We don't have any control of that; many other airlines are affected by similar constraints. But the fact is it's going to happen. The first set of 787 seats comes in April. They'll be installed in the aircraft, the aircraft will go through a certification program, and hopefully it's back into service in October of next year, following which we can start accelerating a couple of aircraft every month through this to completion. The 777 delay was a little bit longer again. It should have already started. It's going to now have an interim refresh during 2025, and then 2026 we'll go through the full interior refit. So we're looking at the end of 2026 for the refurbishment to be well underway.
Would that be correct for both these aircraft types? And for the narrowbody aircraft—well underway if not close to completion for the narrowbody aircraft, middle of 2025? And you've started that with your A320 fleet. How would you respond to those who say that Vistara has a great product on their A320 fleet and the A321 fleet, and that the Air India refurbished aircraft or the existing ones may not quite match that? Would there be parity in terms of quality in the refurbished product?
The refurbished ones, yes. Although there are a small subset of Vistara aircraft that were configured for international operation, so they have a slightly different configuration from the other Vistara aircraft. But I think we're cognizant of the fact that the Vistara aircraft are newer and they were fitted out at a higher spec than the legacy Air India. So we've made the decision that from the 1st of December, all of the metro routes in India are going to be operated with the Vistara aircraft. So it's 27 flights today between Delhi and Mumbai, dozens of flights between the other metros—more than a thousand flights a week are now exclusively with the Vistara product, with obviously an Air India flight number. And that's an acknowledgement that for those premium metro-to-metro routes, we do want to offer a consistent, high-quality proposition. And I think that's a first manifestation of the benefits of the merger of the airlines.
I noticed my hometown of Kolkata is missing from your list of aircraft with the better interiors. It is just a matter of time? I know that safety is obviously your primary concern—it has to be—and yet we've had instances where you've been fined a couple of times by the DGCA, crew not being properly trained to operate certain flights. Why is this happening? Why has it happened more than once?
Each thing has a different cause. Sometimes it's legacy practice, sometimes it is a matter of human oversight, sometimes it's a matter of a systemic gap or something that hasn't been addressed or mitigated through another means. We open ourselves for audit every six months. We open ourselves for external audit whether by IATA or other parties, and that is done with a mission of getting better. And each thing that is identified in these audits that we do ourselves and invite from others is an opportunity to improve. And so it is something that we need to keep at, and something that we spare no expense in doing.
