Air India’s turnaround goes off the flight plan

The reality is that an increasing number of senior sectoral experts and professionals see the issue as rooted in poor governance

As the fifth anniversary of the purchase of Air India by the Tatas — they bought the airline from the government in October 2021 — approaches, the airline’s turnaround has turned into a theatre of the absurd.

Some industry representatives find the idea of a panel quite unfathomable. (Reuters)

CEO Campbell Wilson is set to exit in September, and Air India’s announcement earlier this month of plans to set up an interim panel to run it sparked a joke in civil aviation circles: Why not set up a CoS — committee of (former civil aviation) secretaries — to run the airline?

Some industry representatives find the idea of a panel quite unfathomable. The absurdity of the leadership vacuum was made stark by a press release issued on April 7 that announced Wilson’s resignation; it added that Wilson conveyed his decision to exit the airline as far back as 2024 but had agreed to stay until the airline found an appropriate replacement.

Second, it can be argued that the airline’s board and the Tata management were remiss to allow a situation where someone whose heart was clearly no longer in the job continued for so many months after his decision to relinquish charge.

Kharola appointment sparks fresh debate

The recent induction of a former civil aviation secretary as executive advisor to the Air India chairman and member of the managing committee has also raised eyebrows. Airline insiders are asking what the Tatas expect Pradeep Kharola to achieve as advisor that he couldn’t when he had full freedom to act, as the airline’s chairman and managing director (2017-19, when the airline was with the government). The appointment also took several months to materialise, evidence of the kind of stasis the airline finds itself in.

Mounting losses add to pressure

Air India’s balance sheet exacerbates the situation. In FY26, the airline recorded its worst ever annual loss, at ₹26,800 crore, taking the overall losses after the Tata takeover to more than ₹58,000 crore. This also pulled down the performance of Singapore Airlines, which holds a 25% stake in the airline.

No wonder then that the carrier has been forced to halt annual increments and even cut pay for those above a certain grade. It is also rejigging “over the top” contracts and cutting excessive discretionary spending that had been normalised under the plea of offering “nothing but the best”.

Full turnaround could take up to 10 years

Tata group chairman (also the chairman of the Air India board) N Chandrasekaran’s statement earlier this week, that a full turnaround of the airline could take up to 10 years created minor shockwaves in the industry, which had expected far quicker results under the Tata leadership.

Perhaps the most significant work in progress (WIP) remains the airline’s culture and handling of staff. As one airline insider put it, there was too much focus on the external workings of the airline and too little on the internal. The exit of old staffers and employees — in a bid to boast of a younger staff pool — has proved a double-edged sword, with the airline losing valuable experience and industry knowledge due to the departures.

Along with the tragic crash last June, government officials who worked to materialise the sale of Air India to the Tatas are also embarrassed at the failure of the much-anticipated turnaround. A senior government official who had strongly supported the Air India deal with the Tatas told this writer that he struggles to make sense of this “unravelling” and is hard-pressed to list what has gone right in the experiment so far.

The reality is that an increasing number of senior sectoral experts and professionals see the issue as rooted in poor governance; some say that it makes for a good business-school case study, a classic “how not to do it” manual.

Anjuli Bhargava writes on governance, infrastructure, and the social sector. The views expressed are personal.