Hello To The Star Of India

Air India CMD Rohit Nandan and CEOs from Star Alliance member airlines at the unveiling of the Air India plane with the Star Alliance livery at Delhi's Indira Gandhi International Airport.

Air India’s Maharaja finally found his place in Star Alliance on July 11.
     The membership has experienced some hiccups on its four-year journey.
     Now, the onus will be on Air India to prove to the world that it is indeed a star—not only in providing facilities to passengers, but also giving a leg up to cargo.
     Armed with the Star membership, Air India is looking forward to reviving its fortunes. The carrier had an operating loss of $351 million and a net loss of $652 million in the financial year that ended on March 31, 2014. But the good news from the airline is that it will be able to bring down its operating losses by more than 42 percent in 2014-15, thanks largely to the Star Alliance membership, which will see more passengers and higher cargo volumes.

Cargo Belly Up

     Air India Cargo, the cargo subsidiary of Air India set up in 1954, stopped operations quite some time ago, but continues to manage belly cargo of Air India’s passenger fleet.
     Air India did away with its dedicated cargo freighters.
     Two years ago, Air India wrapped up its cargo business and sold its six B737-200 freighters.
     These planes belonged to Indian Airlines (or Indian, which is now merged with Air India) and had been converted to freighters when plans were drawn up to start cargo operations from the Nagpur hub.
     Later, in the face of worldwide recessionary trends, the plans were disbanded.
     Around that time, Air India officials said that the sale of the freighters was due to the fact that they were “too big for domestic operations and too small for international operations.”


Woe Is We

     To add to Air India’s woes, the airline lacked “a critical distribution network, warehousing facilities, mismanagement, and inadequate infrastructure that had driven away business from Air India's cargo division,” according to officials.
     Over the last couple of years, however, the carrier has been seeing “good business” in cargo.
     According to sources in Air India, in the last two financial years (2012-13 and 2013-14), the carrier had cargo revenues totaling $140 million and $155 million, respectively.

Tonnage Up

     In tonnage terms, 158,220 tons were carried in FY 2013 in comparison to 137,000 tons in FY 2012.      In April-December 2013, for example, Air India carried 131,055 tons compared with the 102,013 tons it carried during the same period of the previous year.
     Airline officials maintained that the ratio of international and domestic cargo was 70:30. While international cargo was seeing an upward movement on routes to Europe (London, Paris, and Frankfurt), domestic cargo, too, was witnessing growth.
     The other international markets where Air India’s cargo was doing well were the Far East and the Gulf. Officials maintained that the cargo division was concentrating on the US market.


Star Of India

     With the Star membership, Air India has added a total of 400 daily flights and more than 40 new destinations in India to the Alliance network.
     The Maharaja carries cargo on all these routes and the management is keen to project Air India’s ‘star’ quality that officials believe will help cargo bring in 30 percent more revenue in financial year 2014-15.
     It is no wonder that Star Alliance’s CEO Mark Schwab pointed out to FlyingTypers that this (present) Air India is “a different Air India” where the management was tough, had adjusted well to the merger (of Air India and Indian Airlines) and had improved the fleet and services.
     “All these qualities will take Air India to a level where it would be able to provide consistently top quality services on the ground and in the air and that would also include cargo.”
     As Air India’s Commercial Director Pankaj Srivastava pointed out:
     “We were benchmarked against one of the world’s top carriers and that kind of benchmarking is done periodically by Online Customer Service Surveys (OCSS).” The survey clearly projected AI as being inadequate—that is now being diligently followed across all departments of the airline.

More Good Words

     As Chairman and Managing Director Rohit Nandan put it:
     “This [the Star Alliance membership] is the opportunity and everybody in Air India now realizes that there are not too many opportunities left and if we do not take these opportunities seriously, then I think we are missing the bus.
     “And I am very happy that the employees have been reacting in a very positive way.”
Tirthankar Ghosh

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