Can Tewolde Gebremariam rescue the embattled Air India?

Tewolde Gebremariam could be forgiven for borrowing an acronym from the Trump universe. Upon arrival from the US, the new Air India boss addressed the employees and sounded the war cry: “Make Air India Great Again!” Ostensibly inspired by MAGA (Make America Great Again) banners popular with Trump supporters.

Gebremariam wears a crown of thorns, and he would not be forgiven if he fails in his mission: the resurrection of Air India. With mounting losses and eroding market share, the new CEO would perhaps be the last port of call for the legacy airline.

Sky’s the limit

“If we do the right things at the right time, sky’s the limit,” Gebremariam told his new colleagues at the town hall in September, just before the board meeting at Bombay House that officially anointed him the CEO. The aviation world is eagerly anticipating what his idea of ‘right things’ would be.

Gebremariam’s track record gives some hints, though. Tewolde, as he prefers to be addressed, spent 37 years at Ethiopian Airlines, working his way up to become CEO after joining it as a traffic officer in 1985. His 11-year-stint at the top saw Ethiopian Airlines implementing ‘Vision 2025’, his blueprint to expand the airline’s scope and ambition, helping it beat continental rivals like Kenya Airways and South African Airways to become the biggest player in Africa.

He achieved it with a strategy of expansion and consolidation all at once. First, he capitalised on Ethiopia’s location at the crossroads of Asia, Africa and the West, to lay claim to a good chunk of the transit traffic as well as the intercontinental business that was otherwise going to the likes of Emirates and European carriers.

At the same time, he increased routes across Africa and invested in airline operations in countries like Zambia and Malawi, turning the Ethiopian network into the de facto option when one considers travelling to or via Africa. By massive fleet expansion and adding facilities like cargo hub, aviation training and MRO (maintenance and repair), Ethiopian achieved the objectives of ‘Vision 2025’ by 2017 itself. In fact, Ethiopian stayed profitable even during the pandemic, simply by turning its passenger planes into cargo service.

Of course, it is another matter whether what worked in Africa will work in a chaotic and complex market like India.

“Gebremariam is inheriting an airline in utter mess… with lousy management controls and with absolutely zero accountability, except for some lame rebranding which has not worked,” said Mark D. Martin, founder & CEO of the aviation advisory firm Martin Consulting. “Gebremariam will have the most difficult start,” he added.

Legacy as a horror story

Billed a ‘White Elephant’ during its sarkari days, Air India was expected to reclaim its glory days with private ownership. Tata, the airline’s original owners, bought it back in early 2022. But Air India steadily went from ‘bad’ to ‘worse’, with customer experience hitting new lows: Delayed or cancelled flights? Check. Flights with technical or mechanical glitches? Check. Bad customer experiences including broken seats and in-flight entertainment systems or transcontinental flights with dirty washrooms? Check. So much so that when reports of a passenger peeing in business class or a stoned pilot steering a flight through severe ‘turbulence’ came in, the reaction was more deja vu than shock.

All through this, however, expenses soared. The airline closed the financial year 2026 with a record-breaking Rs22,000 crore loss. The timing could not have been worse, as Tata Sons was going through a painful transition and crisis of confidence. Unlike the late patriarch Ratan Tata, who mollycoddled Air India with generous funds, the new Tata Trusts chairman Noel Tata questioned the ‘bottomless hole’ the airline seemed to have become. His turf war with Tata Sons chairman N. Chandrasekaran also meant Air India could not take Bombay House for granted any longer.

Tata tinsel

Contrary to the ‘can-do-no-wrong’ image Tata Sons held in the perception of India’s middle-class, it is more or less clear now that Tata’s diagnosis was off the mark. The mandarins at the conglomerate lacked the expertise to run a modern airline, and their priorities were soon found to be a miscalculation.

No wonder Air India recently admitted that its five-year transformation road map, Vihaan.ai, would now take at least ten years.

“The Tata magic did not work because it is a Tata without the Tatas. The passion and energy to run an airline or to run aviation does not exist,” said Martin.

Aviation experts say when the focus should have been on the operational, logistical and maintenance side in the initial days, it spent time and effort on perfecting inflight food and cabin interiors.

Adding to it was a rebranding exercise with new logos and cabin interiors, and new crew uniforms from fashion designer Manish Malhotra. The total cost, including the retrofitting of older aircraft, was around Rs4,000 crore. Add to that the cost of the around 600 new planes ordered, and it becomes a whopping Rs6.7 lakh crore.

Tatas then pulled in Singapore Airlines, with which it run a successful ground handling service across Indian airports, offering it a 25.1 per cent stake in Air India in lieu of the merging their joint-venture Vistara Airlines into it. Some industry insiders say Tata asked Singapore Airlines to help Air India become ‘world class’, and handed over its reins to Campbell Wilson.

Wilson, who was heading the low-cost subsidiary of Singapore Airlines called Scoot, was part of the future forward decisions, including huge orders for new aircraft and a rebranding. “Singapore Airlines did a top-down approach, and clearly whatever great knowledge they had, has not worked,” said Martin. “Instead of fixing the foundation, you just put a new coat of paint and hope it will be a world class organisation. It will never happen that way.”

With AI’s losses dragging down the profits of SIA by 57 per cent, the issue blew up into a political storm back in the city-state, though officially, the government-run entity has reiterated that it is fully onboard Air India’s journey.

Misery loves company

The issue with Air India is not just about a loss-making operation. Both its owners, Tatas as well as Singapore, are in two minds when it comes to injecting fresh funds. With the conflict at the top of the Tatas, it is likely that Gebremariam will not have much of a free hand when it comes to funding and functioning.

Then there is the bogey of Flight 171. The Ahmedabad crash investigation report, already delayed, could mean another round of heavy cash outflow on compensations and litigation.

Down and dirty

“Running an airline is not about marketing or styling. In the case of Air India, you need to get down and dirty, roll your sleeves and fix the problem,” said Martin. And perhaps Gebremariam could well pull it off—having risen through the ranks at Ethiopian, he is well-versed with an operation-focused mindset.

“He’s an astute manager,” said Martin. “Gebremariam will first sort out maintenance, sort out engineering, sort out airport operations, sort out all of that. Only after he does all of it would he come to the product and service. Just by looking at the cabin crew with new uniforms, the stink from the bathroom won’t go. You have to fix the real problem!”

Some decisions would be relatively easier. Route and cost rationalisation, for one, with Air India shadowed on virtually every domestic route by its competitors, even while it has left many lucrative sectors where IndiGo is the sole operator. Streamlining Air India Express—Gebremariam is said to be thinking of merging both operations to avoid duplication in corporate costs—would be another major move he could get to soon.

The rest would be tougher, with a lot of other factors not in his hands. “In the short run, he can’t do anything big, because the Indian airline space is a different ballgame,” said Vishal Sarin, professor and assistant dean, curriculum and pedagogy development, Lovely Professional University, Punjab. “It is an intensely competitive market. Also, regulatory pressures, fuel prices and the exchange rate, the geopolitical situation would all be an exogenous factor.”

Gebremariam can do wonders if given the freedom to run the airline the way he wants, said an aviation expert. “He knows his money. He knows where the money comes from and he knows where the money goes. He is brilliant when it comes to financials and operations and maintenance. But I fear the stakeholders will over-interfere,” he said.

Gebremariam could well become the saviour who worked miracles, or end up as the king of sorrows. “He should just as well have asked for better money,” said Martin. “Because he has a crazy task up ahead!”