Air India Is Turning The Clock Back, Not Turning It Around

Air India may have been privatised, but it has been unable to shed its legacy of having been a PSU for decades. Two announcements the airline management made over the last fortnight clearly show that its new owners share the government's mindset. The airline brought in a new CEO, whose experience as a turnaround specialist stems from his previous job running a state-owned monopoly airline in conditions that bear little resemblance to the market he is walking into. Bringing in an outsider to signal change while those who set the failed targets stay in place is something governments do routinely, and it seems to be at work here too. Secondly, instead of fixing the problem, they move the goalpost itself, hoping that an extended timeline will solve the crisis. This is exactly what AI's owners, Tata Sons, did: they extended the target to achieve a turnaround to five to 10 years.

Let us look at Campbell Wilson's replacement first. Tewolde Gebremariam, the man who built Ethiopian Airlines into Africa's largest carrier, was reportedly snatched away from Pakistan International Airlines, which was, according to a Bloomberg report in July, all set to formally announce his appointment as CEO after completing certain formalities. It can only mean that, after waiting for months, Tata Sons was increasingly finding it difficult to find a new CEO. Gebremariam, meanwhile, faces the same situation as in the case of Pakistan International Airlines, as his appointment is yet to receive security clearance from the government. In a sense, it is more like déjà vu, as the first CEO to be appointed after AI privatisation, Ilker Ayci, the former chairman of Turkish Airlines, declined the post after it became known that security clearance may never come through.

But the larger issue that seems to have been ignored is that while Gebremariam turned around Ethiopian Airlines, it was because the airline is state-owned, with patient sovereign capital and in a market with essentially no domestic competitor. These conditions are not the same for Air India. India is a tough market, with one player owning two-thirds of it, and the space to manoeuvre is limited because taxation rates are quite high compared with other countries. The new CEO also showed his mark by building Addis Ababa into a genuine long-haul connecting hub, whereas Air India's problem is exactly the opposite: it is not short of hubs but surrounded by very good ones.

Wilson set the first target to achieve a turnaround by 2027 when he took over. His five-year turnaround plan, Vihaan.AI, ranging from a refreshed product and higher market share to reliability and a near-new fleet, all fell through. Instead of finding out where the problem lay, Air India has now given the new CEO an extended timeline that runs to as long as 2036.

This isn't just a goalpost being moved; it is a tacit admission from the owners that they simply did not realise the enormity of the problem they had bought and were found wanting.

Published on: Monday, August 10, 2026, 08:57 PM IST