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It’s been 12 days since the Air India AI171 crash that killed more than 240 people. In that time, the airline has not been able to catch a break. Let’s take a look at everything the company has been dealing with and what this means for the business and its customers.
More bad news
Air India has never had it worse. India’s aviation regulator has asked the airline to remove three employees for lapses in crew rostering. It also demanded that the company explain why pilots on two flights from Bengaluru to London were made to work beyond a mandated 10-hour limit.
The company is already under intense pressure, with regulators ordering enhanced maintenance checks and safety inspections on its entire fleet of Boeing 787s — the model involved in this month’s tragedy in Ahmedabad. Recent escalations in the Middle East conflict have not helped, leading to airspace closures and night-time restrictions at some airports, which means flights have become longer and more costly to operate. There were also several reports last week about flights being diverted because of safety concerns, crew issues and even a bomb scare. The airline has been forced to cut its operating fleet — its wide-body planes by 15 per cent and narrow-body planes by 5 per cent.
What does all this mean? Jittery and frustrated customers. Air India has not been successful in convincing passengers that it is on top of its operations. This daily drip of bad news and pullbacks is further shaking already fragile confidence in the airline, with bookings having plunged roughly 20 per cent so far, according to travel associations. The messaging from the civil aviation authority has made it worse. Its recently intensified scrutiny and demands have portrayed the airline as exclusively responsible for all failures. But the action over crew rostering and flying hours stemmed from alleged lapses that occurred before the crash, suggesting the regulator may have previously been too lax.
That is not to say the airline does not have plenty it needs to answer for. Even the condolence message from chief executive Campbell Wilson closely resembled the one posted by his counterpart at American Airlines after a deadly crash in January, drawing accusations of plagiarism. Air India chair N Chandrasekaran has said the company would look into the claims. This may seem minor, but it speaks of a generally slipshod approach that Air India appears to have had. For far too long now, social media videos and news headlines have highlighted failing entertainment systems, broken air conditioning, leakages and other flaws inside its aircraft. Now more than ever, passengers who walk into its planes need to feel confident about its airworthiness.
The airline also needs to communicate better, to both regulators and potential customers, if it wants to instil more confidence in its brand. Ahmedabad’s crash is an inflection point for India’s flag carrier. If it does not get its act together now, when will it?
Are you concerned about flying Air India now? Hit reply or email me at [email protected]
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Making space for space
India’s fighter jet maker, Hindustan Aeronautics Limited, has won a bid to manufacture and sell small satellite launch rockets. This is the biggest step India has taken to open up the space industry, even though the size of the bid is relatively small at Rs5.11bn ($60mn). As part of this deal, India’s national space agency, ISRO, will transfer to HAL the cost-effective, on-demand technology for launching satellites weighing up to 500kg into low Earth orbit. ISRO will also handhold HAL as the company makes at least two such rockets over the next two years.
Space technology has boomed in the past decade, with small satellite launch vehicles increasingly used for communication and several other research functions. While India has had great success in space exploration, especially with the Chandrayaan missions, it has been a slow starter in other areas. The government has big ambitions for the industry, aiming to increase annual revenues from $8.4bn in 2022 to $44bn by 2033. A quarter of this is supposed to come from exports, with New Delhi aiming to be a “global leader”. To meet these goals, the government is pushing for increasing private participation in the sector, especially faced with the growing strategic threat from China’s far more advanced capabilities.
The government’s intention is for all non-defence related areas in the sector to be eventually run by private companies. This is a good move. Private capital will deepen the sector and make it more efficient. There are already several companies, especially in the country’s south, engaged in various related projects. Some 20 groups had expressed interest before HAL won the recent bid, pipping Adani-backed Alpha Design Technologies and Bharat Dynamics.
I am keen to see how the fighter plane maker performs. Its manufacturing capacity for defence equipment is stretched thin and the company is already dealing with a significant backlog, earning it a rebuke from the head of the Indian air force earlier this year. It is crucial that HAL prioritises this new opportunity and manages to meet its deadlines.
Go figure
Markets around the world were jittery over the Middle East crisis. After opening sharply down, the Indian stock markets recovered a little. Brent crude opened at a five-month high, but then settled to $77.87. Gold prices trended down marginally, as the dollar strengthened. Here’s a look at some important numbers for India.
My mantra
“I’ve always treated my career in technology as a marathon, not a sprint. Or, to borrow a cricket analogy, more like a Test match than a T20 — strategic, steady and built for the long haul. In a fast-moving industry, it’s easy to chase quick wins, but true impact comes from pacing yourself, staying resilient and taking care of your mental and physical wellbeing along the way.”
John Lombard, chief executive, Asia-Pacific, NTT DATA
Each week, we invite a successful business leader to tell us their mantra for work and life. Want to know what your boss is thinking? Nominate them by replying to [email protected]
Quick question
Do you think Iran has the ability to strike back at the US in a significant way? Tell us here.
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Buzzer round
On Friday, we asked: Which iconic movie, released 50 years ago, was a real threat to the beach hotel business and the scuba-diving industry the summer it launched?
The answer? Jaws was the monster hit that sent people screaming from the beaches and into cinemas.
Many of you got the right answer for this. Ram Teja was the first to write in, followed by Aniruddha Dutta, Yaman Singhania and Rudrajit Dawn. Congratulations!
Thank you for reading. India Business Briefing is edited by Tee Zhuo. Please send feedback, suggestions (and gossip) to [email protected].
