Group plans sea change in AI, to rope in TCS for tech thrust

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MUMBAI: Tata sons is preparing to make radical changes in Air india that would reduce costs and streamline operations to better position the carrier in competitive skies. A new group of directors would take over Air India’s board once the government transfers ownership of the airline to Tata Sons.
The Tata Group holding company would also seek to install new leadership in Air India, refinance its costly debt, renegotiate high-cost supplier contracts and renovate old planes, among other moves. It will further leverage the capabilities and knowledge of other operating companies such as TCS and Taj Sats to review Air India’s existing operating model and cost structure. “Did you know that TCS runs the IT systems and applications of most of the national carriers in other countries except India?” a Tata Group executive asked. “Once the deal is finalized, TCS would step in to manage the A to Z of Air India’s IT and digital operations.” This would improve Air India’s efficiency and reduce operating and maintenance costs. TCS is the technology partner of Vistara, a joint venture between Tata Sons and Singapore Airlines. It also manages the computer and digital systems of Singapore Airlines, the second best operator in the world.

Tata Sons would hire a new CEO for Air India as part of the airline’s makeover plans, a different person said. In addition, Saurabh Agrawal and his finance team at Tata Sons would have to solve Air India’s business problems by rolling over expensive debt, reducing lease obligations and reestablishing contracts with suppliers. “There is a good chance that a foreigner will be selected to run Air India. Chandra (referring to the president of Tata Sons) knows many airline CEOs and their senior leadership individually, ”said the second person. Before Chandrasekaran became president of Tata Sons, he was the CEO of TCS, which has an envious list of airline customers.
It is unknown who would lead Air India’s board, but the first person quoted above said that if the current pattern in which the chairman of Tata Sons is the chairman of major operating companies is followed, Chandrasekaran would lead the airline’s board with Ratan. Tata as president emeritus. .
While Tata Sons would take over Air India’s 15.3 billion rupee debt and certain “identified” current and non-current liabilities, in M ​​& As the devil is in the details, said a banker from investment. When Tata Sons took over VSNL in 2002 from the government, the latter, which had retained some shares in the telecommunications company until recently, backed it, but in the acquisition of Air India there is no guarantee of the Center (such as the interruption of PSU and Parliament that officials use only Air India for official travel after change of ownership). This would affect Air India’s business as it would have to compete for this cake.
Tata Sons could also leverage its ties with large aerospace companies Boeing and Airbus for better deals to replace Air India’s previous generation jets with more fuel-efficient jets to better compete with rivals (Tata Advanced Systems handles manufacturing and Aircraft / Aircraft Component Assembly for the US and French Giants). It could also use Air India’s ground handling business unit to service not only its two existing carriers, Vistara and AirAsia India, but also other airlines, which would increase their income. Additionally, the company’s in-flight catering company, Taj Sats, could be used to serve meals to Air India passengers at 30,000 feet. Several operating companies helped Tata Sons conduct Air India due diligence, as Tata Steel reviewed labor contracts, and its capabilities will be further utilized after the completion of the acquisition, another group executive said.
An industry expert said Tata Sons would also have to modify the schedules of its four airlines so that they provide domestic flight information to fill the vast corps that go nonstop to international destinations. This scissor operation (people getting off narrow-body aircraft and then moving to long-haul flights in wide bodies) to transport people in and out of India is currently carried out mainly by carriers from the Gulf.





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