Leadership Gaps To Finding Direction: Air India’s Dreams Need Much Groundwork

On January 26, 2025, an Air India flight from Mumbai to Dubai, originally set to depart at 8:25 am, faced a five-hour delay. Passengers boarded on time but were left seated without air conditioning or water during the wait.

As it happens with these situations, it made it to social media. Tejasvi Soni, who was on the flight, said that passengers had started to feel suffocated “and yet the crew did not provide any relief until the passengers forced them to open the gates and deboard”.

Air India has seen several such incidents in recent months. The airline, once a symbol of national pride, has increasingly come under scrutiny because of its seeming lack of direction and deteriorating services.

This comes even as Air India has a five-year Vihaan.AI transformation programme — that includes the induction of over 100 new aircraft, such as the Airbus A350 — to enhance both domestic and international operations, the airline is placing new fleet orders and also expanding its route network.

Despite CEO Campbell Wilson repeatedly highlighting the airline’s vision for a world-class international network, backed by cutting-edge fleet modernisation, its journey in reality has been marred by frequent flight delays, outdated interiors, and declining service standards.

Amidst these service shortcomings, the airline also aims to compete with foreign airlines. While the airline’s ambitious expansion plan is admirable, execution remains critical.

But to understand how Air India reached this point, it’s essential to revisit its history. How did the airline, launched with ambitious goals, transform from a trailblazer in Indian aviation to a company grappling with operational and service challenges? What went wrong along the way?

A Journey Through Time

The story of Air India dates back to April 1932, when the Tata Group secured a contract to carry mail for Imperial Airways. That year, back then known as Tata Air Services, made its maiden flight from Karachi to Mumbai, marking the beginning of a legacy. Within its first year, the airline flew 2,60,000 km, delivering about 10 tonnes of mail, and earned a profit of Rs 60,000.

“Air India was established to connect India with foreign destinations, focusing on international air travel, while Indian Airlines primarily handled domestic connectivity. Later, Indian Airlines also operated short international sectors, like the Middle East, to optimise aircraft utilisation. Air India’s primary role remained international connectivity,” Manish Sinha, aviation expert told The Core.

Back then it was a government initiative, driven by the need for international connectivity for Indian citizens abroad, including diplomats and required a reliable mode of transport.

Fast forward to 2018-2022, and the story of Air India takes a different turn. During this period, the airline’s financial health deteriorated drastically. With a staggering debt of over Rs 60,000 crore, Air India struggled to meet operational costs and could not modernise its fleet or improve services. By 2020, it was losing Rs 20-25 crore daily, a situation worsened further by the Covid-19 pandemic, which grounded its fleet and significantly impacted its revenues.

Despite several attempts, the Indian government was unable to privatise Air India. A 2018 attempt to sell 76% of the airline had no bidders, due to the airline’s bloated workforce, huge debt, and inefficiencies.

The Tata Group’s Return

In 2021, there was a breakthrough when the Tata Group, which originally founded Air India in 1932, bought back the airline for Rs 18,000 crore. This acquisition reignited hopes for a turnaround, but the path ahead was not smooth.

The pandemic had already devastated the global aviation industry and Air India was no exception. The airline’s financial struggles deepened and operational issues became more evident. While private airlines adapted by trimming costs, Air India’s inefficiencies became more apparent. The airline’s image as a ‘cash-burning operation’ became a widespread narrative.

Even under the new management, Air India’s struggles to shake off its old image persisted. The airline faced multiple instances of poor passenger service, including delayed flights, mishandled baggage and technical glitches.

The infamous ‘pee-gate’ in late 2022, where an unruly passenger’s behaviour went unchecked, exposing gaps in crew training and incident management.

“To operate at an international level, the first step is to strengthen your staff requirements, ensuring that consolidation is prioritised. Alongside this, training and development costs are considerable, representing a substantial expense. I am confident that the increase in costs compared to the previous Air India would be upwards of 20-25%. These are the costs the airline is facing,” Sinha said.

Towards Global Competitiveness

Despite its troubles, Air India has been positioning itself as a global player in the aviation market. To make this happen the airline plans a major network expansion, with the induction of 350 new aircraft, including leased Boeing 777s and Airbus A350s.

Wilson Campbell took over as managing director and chief executive officer in 2022 and has been leading the transformation of the airline. “Campbell, a veteran of the industry, brings immense expertise, but I would also credit the Tata culture for playing a foundational role in this journey. The Tata ethos serves as the base, the plinth, on which this transformation is being built,” Sinha said.

However, the road to international competitiveness is filled with structural and operational challenges. The airline’s outdated interiors and broken in-flight entertainment systems have not been upgraded quickly enough, largely due to global supply chain issues and a shortage of parts.

“That unfortunately is not changing quickly enough,” Sanjay Lazar, aviation expert and CEO of Avialaz Consultants told The Core.

Global supply chain issues and shortage of parts have delayed refurbishments. Air India expected 50 Boeing 737 MAX deliveries by December 2024, but production delays and a strike at Boeing's US manufacturing facilities pushed this to June 2025. By November 2024, 35 were delivered, with 15 still pending, affecting fleet expansion and route plans.

But just ordering new aircraft is likely not going to help its cause. Air India still faces operational hurdles, needs to modernise its fleet, and prove it can meet the expectations of an increasingly discerning global audience.

“The thing with Air India right now is that you can't just keep adding new aircraft and hope things will magically fall into place. You have to take concrete action. It’s not enough to wait for some miraculous transformation. You need to take charge and make those changes yourself. That’s where Air India is struggling,” Martin said.

In December 2024, Air India announced an order for 100 additional Airbus aircraft—10 A350 widebodies and 90 A320 family narrowbodies, including A321neos. This adds to its 2023 mega-order of 470 aircraft with Airbus and Boeing. The new deal boosts Air India's total Airbus orders from 250 to 350, including 40 A350s and 310 A320 family aircraft.

“We feel that 470 planes may not be enough to match the new Air India’s global ambitions. The slowdown at Boeing has impacted Air India’s larger long-haul plans, and they will need to compensate for that, given that Air India wants to maintain its international route edge over Indigo and the US carriers, especially in the lucrative US market, before the Russian airspace reopens,” Lazar said.

Services Need A Fix

Another viral video detailed a malfunctioning in-flight entertainment system on a long-haul flight, leaving passengers frustrated for hours.

“It’s the travellers — the consumers — who pay the price. It’s people like you and me and thousands of others who are speaking out about it. Sure, a few complaints could be mistaken, but when over 10,000 people are voicing the same concerns, it’s hard to dismiss them as wrong,” Mark Martin, founder and CEO of Martin Consultancy told The Core.

In another instance, a Delhi-to-San Francisco flight in May 2024 experienced an exhausting 30-hour delay, followed by chaos in California as many passengers struggled to retrieve their checked-in luggage, causing significant inconvenience and further denting the airline’s reputation.

Even after its acquisition by the Tata Group in 2021, the airline has struggled to shake off its reputation for delays, outdated interiors, and inconsistent service. The sheer scale of its turnaround project requires not just time but strategic clarity.

“There is a need for funding to acquire aircraft as well as the need for capital to refurbish existing assets. There’s a fine balance—too much borrowing isn’t sustainable. So, finding the right way to balance these investments directly impacts the frequency and duration of maintenance. If you have 100 aircraft and 80 need service, and only five are fixed at a time, it will take time to get everything back on track,” Sinha said.

Martin's assessment resonates with Air India’s ongoing struggles to refurbish its ageing fleet. The airline recently launched a refurbishment program worth $400 million, aimed at upgrading its wide-body aircraft with new seats, in-flight entertainment and modern cabin designs.

Competing international airlines, such as Emirates and Singapore Airlines, already boast state-of-the-art aircraft, putting Air India at a disadvantage.

“It's unrealistic to refurbish all aircraft at once due to the high costs involved and the capital infusion required would make it unviable. My priority as an airline would be ensuring viability. They are already investing billions in fleet purchases and our losses are staggering. The top priority is reducing those losses because, without that, how will we pay salaries, maintenance or meet safety standards?” Sinha said.

Leadership Gaps

The airline is also in the midst of complex mergers with Vistara and AirAsia India, aiming to consolidate operations and streamline services. This integration process involves aligning different corporate cultures, systems and operational procedures, presenting substantial organisational challenges.

But who is making these complex decisions?

“The leadership is being guided by someone with a Tata background, possibly an ex-Tata employee, who doesn’t come from the aviation industry. This has led to some leadership gaps at both the top and bottom levels, creating a considerable grey area in between,” an aviation expert told The Core on anonymity.

In 2024, as part of its preparations for the Vistara merger, Air India introduced a voluntary exit programme for its permanent ground staff. The airline rolled out two schemes: a Voluntary Retirement Scheme (VRS) for employees with at least five years of continuous service and a Voluntary Separation Scheme (VSS) for those with less than five years.

In its communication to ground staff, Air India clarified that all permanent ground employees—except pilots, cabin crew, and licensed role holders—would be eligible for these schemes.

“Many ex-government employees and legacy staff, particularly those around 55-56 years old, are set to retire in the coming years, leading to significant turnover. The real challenge will be finding the right talent to replace them. The focus should be on bringing in leaders with deep aviation industry expertise,” the expert added.

Other industry experts have also raised concerns about Air India's lack of clarity regarding its goals.

“Air India is capable enough to compete with international carriers. The question is what kind of product it needs to become. Whether Air India needs to target the super-rich luxury travellers or to be best in class as an efficiently run full-service airline? That is going to be their conundrum.” Lazar said.

This conundrum lies at the heart of Air India’s transformation strategy. The airline is at a crossroads, needing to decide between creating a luxury-focused product akin to Emirates or Qatar Airways or building an efficient, full-service airline that balances affordability with quality.

Furthermore, Air India faces stiff competition from established international carriers, necessitating significant improvements in service quality and operational efficiency to reclaim market share.

In 2023-2024, 54.3% of India's outbound traffic was to the Gulf and Africa, and 53.9% of India’s inbound traffic was from the Gulf and Africa.

While on the domestic route, Air India was traditionally a long-haul international airline, and Indian Airlines was a domestic player. “Post-merger, the Airbus fleet catered to the domestic market and Indigo came in and swooped up 63% of the market share,” Lazar said.

Sinha on the other hand believes that without strengthening their domestic market, they will only get indirect international traffic, which is something Air India would want to avoid.

“By indirect, I mean code-share arrangements, which are generally for remote areas. When it comes to competition, Air India isn’t just up against IndiGo; its real competition is Emirates,” he said.

In India, one of the most notable codeshare partnerships is between Air India and Singapore Airlines, which recently expanded to cover 11 Indian cities and 40 international destinations. This means passengers can seamlessly book flights across both airlines’ networks under a single ticket.

Air India also has similar agreements with global carriers like Lufthansa and United Airlines, giving travellers access to a wider range of destinations through shared flight options.

Route Expansion Dreams

As of the April-June 2024 quarter, Indian airlines have increased their share of international passenger traffic to 45.6%, up from 44% in the same period the previous year. This indicates that foreign carriers account for approximately 54.4% of the international market during this period.

The airline plans to expand its routes aggressively, including new services to major hubs like Frankfurt, Paris and Singapore, along with retimed flights to ensure better connectivity.

“Air India is already catering to the lucrative US market, which generates significant traffic, and they are now expanding to include additional destinations in the US. Similarly, in Australia, with the arrival of new aircraft and the merger with Vistara, Air India is strategically planning its flight schedules to cover destinations that were previously not served, offering direct connections to these places,” C.K.Govil, president of The Air Cargo Associations of India told The Core.

The airline plans to introduce new routes to Manila, Jakarta, and Los Angeles in 2025, aiming to strengthen its presence in these regions.

In January 2025, Air India launched a fourth daily Delhi-Bangkok flight, increasing the route's frequency from three to four times a day. This enhanced service provides improved connectivity between Bangkok and multiple destinations in North America and Europe via Air India's Delhi hub. Additionally, from January 16, 2025, the airline began operating retrofitted A320neo aircraft on all Delhi-Bangkok flights.

“They needed to continually expand their network, introduce new aircraft, and focus on completing the merger with Vistara, as well as the integration of AirAsia with Air India Express. The challenges were numerous, and they have been diligently working on a plan,” Jitendra Bhargava, an aviation expert told The Core.

Beyond fleet expansion, Air India recently integrated three airlines—Vistara, Air India Express, and AirAsia India—into a single cohesive entity. Each airline brings unique strengths but also distinct operational cultures and fleets, making this a complex merger.

While Vistara’s modern fleet and service standards bring promise, integrating its operations into Air India’s global network will take time and meticulous planning. Similarly, Air India Express and AirAsia India are crucial for strengthening regional and budget travel but require alignment with the broader strategy.

“Initially, there were hiccups due to the ageing fleet and staff-related issues, as the aircraft were outdated and didn’t meet the standards passengers expected. It was undoubtedly a tough period for the airline as it navigated this transition while also managing the complex task of merging three airlines into one cohesive entity,” Govil said.

The Industry Remains Hopeful

In the New Year message, Wilson said the airline's commitment to fleet modernisation, noting that more than one-third of the twin-aisle fleet now features modernised interiors and entertainment systems, with plans for the remainder to undergo similar upgrades over the next two years.

“It will take at least two more years for them to fully refurbish and bring everything up to the required standards,” Sinha said.

Air India was amongst the best in the world some decades ago and it has partnered with Singapore Airlines, one of the top three airlines in the world.

“I think Air India is capable of competing with international carriers. The question is what kind of product it needs to become. Whether Air India needs to target the super-rich luxury travellers or whether it needs to be best in class as an efficiently run full-service airline. That is going to be their conundrum in our opinion,” Lazar said.

Air India undoubtedly requires significant refurbishment, but industry experts are hopeful that once the necessary changes are implemented, the airline will be well-positioned to compete with international carriers.

“Change at Air India won’t happen overnight, and people need to give the airline enough time for its transformation. Several factors must be taken into account. First, consider the state in which Tata inherited Air India. Second, they needed to assemble a new management team post-takeover. And third, there was a significant task of training employees to adapt to a new work culture,” Bhargava said.

One of Air India's key selling points is its direct connectivity from Indian airports to new international routes. This strategic move will eliminate the hassle of transiting through multiple airports and enduring repetitive security checks, making travel far more convenient for passengers.

Air India’s crew have been facing criticism for being rude, unhelpful and not making enough effort to ensure passengers' comfort. As a part of the change, the airline is actively working on improving crew performance.

This includes rotating rosters and integrating Air India staff with Vistara flights to help them better understand and meet the required service standards.

Additionally, quick fixes like upgrading the appearance and feel of its aircraft are also in the pipeline. “This dual approach is already underway. Over time, these efforts will certainly raise the service bar,” explained Sinha.

From resolving legacy issues and upgrading service standards to integrating operations and ensuring uniformity across its fleet, the airline has a long way to go before it can compete with leading international carriers.

As per industry experts, meeting international standards requires more than ambition—it demands consistent execution, operational excellence, and a relentless focus on customer experience. Can Air India overcome these hurdles and truly withstand the pressures of global competition? The next few years will have an answer.