Air India Chairman Says Airline Moving Towards Turnaround

Bengaluru: The ailing Air India is moving towards a turnaround and expecting even better performance after narrowing its loss in the June quarter to Rs 246 crore, from Rs 316 crore in the corresponding period a year ago.

"Yes, we are definitely moving towards that turnaround. Last year it was good. This year would be better. Next year should be even better. We narrowed our June quarter loss to Rs 246 crore from Rs 316 crore in the corresponding quarter last year," Air India chairman Ashwani Lohani told reporters after inauguration of the airline's new booking office here.

Air India's operational margins were affected by an intense fare war unleashed by private carriers during the first quarter of this fiscal year, leading to the state-run carrier posting an operational loss of Rs 246 crore.

Asked how long it would take for Air India to come out of losses, Mr Lohani said he could not give a specific timeline due to factors relating to the market.

"I can't give a specific time because a lot of things are decided by the market. The ticket prices are decided by the market. However, we would try to improve our services or efficiency," he said.

To a query, Mr Lohani admitted that the market share of the airliner has gone down domestically, but internationally it was a big player.

Mr Lohani said Air India plans to regain domestic market share by going in for huge induction in domestic segment in next one year.

"In next one year, there is going to be a huge induction in domestic segment, and with that induction we are going to regain our market domestic market share."

On tapping international market, Mr Lohani said the airliner will have nine brand new aircraft - six Dreamliners and three Boeing 777 - in the next two years.

"We initially had ordered 27 Dreamliners, of which only 21 have joined our fleet. There are six more going to join in next one year. Besides, we have a pending order of three Boeing 777, which has been confirmed, and will join us in 2018," he said.

Mr Lohani said no other airline connects Europe and the US better than Air India with non-stop service being its USP.

"No airliner connects Europe better than us. Today, we have nine direct destinations to Europe and we also have four direct destinations to the US - that is Chicago, Newark, San Fransisco and New York. Our USP has been to give no-stop service. In contrast, other air carriers give indirect services, internationally," Mr Lohani said.

To a query, he said that unlike private airliners including IndiGo and GoAir, which are continuously adding capacities in the domestic sector, Air India has not been doing so.

"Like all the private carriers like Indigo, GoAir, SpiceJet, who are in competition, they are continuously adding capacities, whereas in domestic side we have not been adding capacities till now," he said.

Mr Lohani said the nearest competitor to Air India boasts of having 100 aircraft, but fly only in 38 destinations in India in contrast to his airliner which has a wider reach.

Air India will be adding more frequencies in the trunk routes by connecting Tier 2 cities with metros, and Tier 3 to Tier 2 cities, which will integrate the entire traffic within the country, he said.

Asked how many aircraft Air India is going to add, he said it had placed order for 30 Airbus A-320s and looking at adding ten more to its fleet in next two years.

"We have already placed 30 Airbus A-320s and looking at ten more aircraft. In all, we should have 30-40 Airbus A-320s in next one or two years," he said.

Asked about the ad dispute with Indigo airlines, Mr Lohani said, "I don't want to react to that. This is a festive environment (AI had inaugurated new office), I would like to speak about good things."

Replying to a query, Mr Lohani said the attrition rate has gone down drastically because of measures taken to work for the welfare of employees.

"Lot of people had left Air India and joined private airlines earlier, but the attrition rate has gone down drastically because we are taking care of our staff. It has been a transformation of their morale. It is so high at this point of time.