NEW DELHI (Reuters) – Until recently, Air India was locked into an outdated manual pricing system when setting air fares, but it has turned to rivals to extract more revenue from each flight. are migrating to algorithm-based software they have used for years.
In another sign of a whirlwind shift in the formerly government-owned airline under new owners Tata Group, Air India is testing OpenAI’s popular chatbot, ChatGPT, to It’s replacing paper-based practices.
The modernization effort has been underway for years as Air India sheds decades of bureaucratic processes and seeks to win back customers from the Emirate of Dubai and its main domestic rival Indigo (INGL.NS). It highlights the decline left by years of underinvestment.
Chief Executive Officer Campbell Wilson told Indian airline executives last week, “Frankly, this system is mostly terrible, but it’s a good one,” and “temporary” the existing architecture. He added that it was a chance to start from scratch instead of .
In addition to restructuring every aspect of its operations, from systems to supply chains, Air India will also consolidate four Tata-affiliated airlines and Air India will merge with Vistara to create low-cost Air India Express and Air India Express. We will also integrate Asia India.
In some areas, such as technology, a blank slate approach is possible, says the 52-year-old New Zealander. That’s why he’s putting artificial intelligence (AI) and other tools at the heart of his India reboot.
Modern “revenue management” software aims to stay one step ahead of demand, and instead of the old method of setting one fee per block of seats, the We are continuously predicting whether it is possible.
The result is higher revenue per flight, an easily achievable achievement in transforming the company.
Wilson faces a tangle of fleets and staff as daunting as Delhi’s zigzag traffic, and obstacles littered the airline’s path to profit.
“Complexity is the airline curse,” says Keith McMullan, partner at UK-based consultancy Aviation Strategy, with experience in the Indian market.
“What they’re saying is absolutely correct. They should start from scratch, but saying it and actually doing it are two very different things,” he said. “The danger is in continuing to fight legacy-related fires.”
Air India’s success is important to Prime Minister Narendra Modi’s government, which wants to turn India into a global aviation powerhouse like Dubai and Singapore.
Wilson’s immediate game plan is to tackle the immediate problem of flying idle planes before Air India begins receiving 470 jets ordered in a record deal last month.
For example, we are working with Tata Technologies to locally manufacture plastic parts for economy class seats instead of waiting for suppliers to provide obsolete parts.
And it’s getting planes it can find on lease while restructuring its network strategy to attract Indians abroad.
In a bystander interview at last week’s CAPA India conference, Wilson said that as the upturn gains momentum, any contradictions can be resolved.
“This is a startup as well as a transformation,” said Wilson, who was appointed to lead the turnaround after Tata regained control of its career last year.
Drawing on his experience as the founder of Singapore Airlines’ (SIAL.SI) low-cost carrier Scoot, he told Reuters: .
However, he said the clean sheet approach cannot and should not be applied everywhere.
Analysts say Wilson’s gradual turnaround plan will be put to the test as Air India pursues two mergers.
Airline mergers in India have been largely unsuccessful, with Air India being hampered by the failed integration of Indian Airlines in 2007.
Jett and Kingfisher are currently bankrupt.
Air India’s fleet is already a mix of Airbus (AIR.PA) and Boeing (BA.N) jets with multiple cabin configurations. This becomes even more complicated when you absorb a new career.
Binaud Kannan, CEO of Vistara, a joint venture between Tata and Singapore Airlines, told Reuters: “Managing a mixed fleet is a nightmare, given options that no airline wants to do. ‘ said.
Air India, once the inspiration for Singapore Airlines, has fallen far behind, especially when it comes to service and punctuality. Improvements in this area are urgently needed if India is to regain market share from Gulf airlines, which carry most of India’s international traffic.
There are some early signs of success. Air India’s international passenger numbers are expected to increase by 28% in the October-December quarter compared to April-June, while its domestic share will grow from 7.5% in mid-2022 to 9% at the end of February, according to the government. Increased. data.
Air India’s merger with Vistara would jump those numbers significantly, but the deal presents new challenges.
In an interview at Vistara’s office near Delhi, where the average age of employees is 29, Kannan said, “You can get everything right, but the people and the culture… it’s not easy to get it right. ‘ said.
50 plus on Air India.
“The intention is huge,” Kannan said of the integration, which is expected to be completed by March 2024.
Reported by Aditi Shah and Tim Hepher, New Delhi.Editing by Jamie Freed
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