Air India bears the brunt of supply chain woes, Air India, Campbell Wilson, Supply Chain Woes, Singapore Airlines, Air India-Vistara

The entire world is facing supply chain issues and the aviation industry is bearing the maximum brunt of it, as the aircraft spare parts don’t reach on time in case of an aircraft emergency or grounded aircraft. This leads to increased time on ground for the airline, increasing their overall cost of operations. This is one of the major supply chain issues faced by airlines across the globe. Speaking on this issue, the chief executive of Air India, Campbell Wilson confided that this problem is ‘much worse’ for Air India as the airline has reached the halfway mark of its five-year transformation program. The CEO also said that Air India is still far away from reaching the international standards of its rivals like Emirates and Qatar.

Most of the Air India aircraft were delivered way back in 2010 or 2011, almost a decade back. Since then, the aircraft has never undergone a product refresh or proper interior maintenance. “If we’ve got legacy seats and legacy in-flight entertainment systems, we’re operating with one arm tied behind our back,” Wilson said.

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The challenges are the biggest at the premium end of the plane as Air India looks to lure high-spending travellers, added Wilson.

Air India has already placed huge orders to upgrade its fleet and just this month kicked off a $400 million plan to refit old planes to drive its transformation. Air India’s restructuring is being closely observed by lessors as well as its investment partner Singapore Airlines (SIA) (SIA will owe a 25% stake in the merged Air India-Vistara entity and will further invest another $600 million for the airline’s turnaround plan, SIA CEO is also set to join the Air India’s board post-merger)

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Air India, under the Indian government’s hand, had suffered irreparable damage as a brand. Torn and worn-out seats, lack-lustre aircraft interiors, low quality of dining options and complete lack of in-flight entertainment didn’t endear the airline to many passengers. Many people carry that same image of Air India in their heads even today. Hence breaking this image and emerging as a true world-class airline is one of the biggest challenges before the airline management. For this, the airline needs to replace the torn and worn-out seats on its legacy aircraft along with providing premium services to make the passengers trust the brand again.

However, due to the current geo-political tensions, war between Russia-Ukraine and Israel-Gaza conflict has led to escalated supply chain problems. Seat manufactures are dealing with shortage of labour and capacity, Wilson said, “making it difficult for us to revamp our legacy fleet with new seats”.

Just recently the airline announced refurbishment of 67 aircraft with 27 narrowbody refurbishment to be complete by mid-2025. The airline had slated the retrofit of 40 widebody aircraft towards the start of 2025, but it has been pushed back due to the lack of supplies, mainly business and first-class seats.

“Once the retrofit on widebody starts, it will take about two years to bring the widebody fleet to international standards,” Wilson added.

Speaking on the utilisation of older aircraft and its impact on the overall revenue and profits, Wilson claims that “older jets have led to lower utilisation by about an hour per day on average across Air India’s fleet, and even more for planes flying long-haul routes like to the US, as an interim solution, Air India is ring-fencing some of its most profitable long-haul sectors like Mumbai to San Francisco and Delhi to London by guaranteeing modern planes.”

When Tata group took over Air India from the government, the airline’s systems were outdated, offices scattered and there were 30 aircraft on the ground for want of spare parts. “”It was just in absolute shambles. We’ve had to really spend the first six months stabilising the ship,” Wilson said.

When Tata regained control in 2022, the airline’s systems were antiquated, offices scattered and there were 30 aircraft on the ground in need of spare parts.

Going ahead, Air India will complete the merger of Air India Express and AirAsia India by October 1, 2024 and by November 1, 2024 Vistara will merge with Air India. The airline’s maintenance plans are in place with a new upcoming Bangalore facility set to be operational by 2026. Wilson agreed that this shift to in-house maintenance capabilities development will help reduce maintenance delays for the airline.

“Two years in, I think we’re in a good place,” Wilson concluded.

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