Air India’s urgent makeover to target millennials after Tata takeover

The image makeover of the airlines, the largest among the carriers in India, is being urgently done as nearly 53 percent of air passengers is estimated to be the tech-driven millennials. This figure is expected to go up to more than 60 percent in the next 10 years, according to a senior airlines marketing executive.

The executive said given India's young demographic profile, Air India in its new avatar needs to target the millennials who need a flying experience markedly different from the old one.

One of the changes Air India plans in its approach is to address the passengers as "guests" who will get to hear a recorded message from iconic Tata Group patriarch Ratan Tata, reports our New Delhi correspondent.

The private Air India has to work really hard to shed the tag of "late Latif" when it comes to maintaining punctuality of take-off and landing.

The first week of Air India's relaunch will be crucial and it is the front-desk staff at the airport and the cabin crew who will be the airlines' biggest brand ambassadors as they are the carrier's interface with the passengers.

While the turnaround time for Air India under the Tatas will take time, its competitiveness needs to be in the league of IndiGo in the domestic market and that of Singapore Airlines, Emirates and Etihad on international routes, especially to key Middle East destinations, the US and the UK.

Foreign airlines had a much larger market share on international routes than Air India till the disruption of regular commercial flights by the Covid-19 pandemic.

In the domestic segment, Air India will need a strong cost-driven business model.

At the heart of airline business at a time of rising aviation turbine fuel price, is controlling the cost, said aviation industry officials. Of course, other benchmarks in this will be on-time departures, load factor, average age of aircraft, airport turnaround time and other human resources to come up with a superior flying experience for passengers.

While private Indian carriers IndiGo and SpiceJet have built their business from scratch, the Tatas are starting off with the advantage of coming from the experience of its existing carriers Vistara and AirAsia.

One of the biggest challenges the Tata Group would face in turning Air India around is bringing the much-needed expertise in civil aviation from outside India.

Image makeover has a price but can the Tatas afford it with the kind of war chest it has and at the same time work on cost-effectiveness?

The Tatas face the challenge of funds after paying Rs 18,000 crore for buying into Air India with Rs 15,300 crore of debt and Rs 2,700 crore to be paid to the government.

The government's stake sale in Air India to the Tatas marks the first big-ticket privatization programme of Prime Minister Narendra Modi's disinvestment drive after a two-year process.