Air India's load factor improves to 80% under Tata group management

It has risen to 80% in February-June period, compared with 60%; but market share is lower than in January

Management and leadership changes, in addition to synchronising operations between all its airlines, are showing visible results for Air India. Data from the Directorate General of Civil Aviation (DGCA) show that there has been a marked improvement in key operational parameters of Air India after the Tata group took complete control of the national airline in January.

One of the most dramatic improvements has been noticed in Air India’s passenger load factor (PLF) – a crucial metric of capacity utilisation of an airline’s fleet that shows how many seats it has been able to fill on every flight.

From February to June, Air India has clocked an impressive 80 per cent load factor on its domestic services. During the same period last year, when it was under government control, its domestic PLF stood at 60 per cent.  In the whole of 2021, it managed a PLF of 68 per cent. This in many ways is a return to its 2019 PLF levels. And it still has some way to go to catch up with its competitors like IndiGo, SpiceJet, and GoFirst, which utilise their capacity better than the Tata-owned airline.

A similar turnaround in operational efficiency is discernable in its international operations. After Tatas’ takeover in January, the PLF on its international operations rose to 80 per cent, compared with 63 per cent in the corresponding period last year.

However, Air India hasn’t been able to translate that into greater market share. In June, its domestic market share stood at 7.5 per cent, considerably lower than the 10 per cent it had inherited in January.

While market leader IndiGo has managed to retain its share at 56 per cent, Vistara, another Tata-owned airline, has eaten into Air India’s share. Vistara commanded a nine per cent market share in June, up from 7.5 per cent in January. AirAsia India, the third airline owned by the Tata group, also managed to increase its market share during this period. Vistara and AirAsia India now have a domestic market share greater than the much larger Air India domestically.

Air India, which had the highest number of passenger complaints, has also managed to resolve issues like delays, and denial of boarding, among others, that had left flyers fuming. In June, it halved its complaints per 10,000 passengers to just two, compared with the same month last year.

Within a couple of months of taking over the national airline, the Tata group had effected management changes led by the appointment of Tata Sons Vice-president Nipun Aggarwal as the airline’s chief commercial officer. A couple of other senior management personnel from Tata Consultancy Services (TCS) and Tata Steel were also brought into key roles.

It also retained some “old hands” appointed by the government. One of them is Captain RS Sandhu, the airline’s chief of operations. In June, Campbell Wilson, former CEO of Singapore International Airlines (SIA) low-cost carrier Scoot, was onboarded as Air India’s chief executive officer after the requisite clearances were given by the Union home ministry for his appointment.