Air India's Virgin (Ad)venture

Air India's Virgin (Ad)venture
Abhijit Bhattacharyya

DECEMBER 18: The high profile Richard Branson of Virgin Atlantic's recent elephant ride in Delhi poignantly depicts the aviation scene of India. UK's Virgin now proposes to ride the Oriental Maharaja's elephant, the Maharaja who has dismounted after having fallen on bad days owing to bad debt and self-inflicted mismanagement.

The two airlines which have proposed commercial matrimony at high noon on a balmy December day, are a stark contrast in their genealogy and upbringing! Air India with 67 years in the air, 24 aircraft, 46 operating ports of call (12 Indian, 26 international and 08 code-sharing) is in the red. Virgin Atlantic, at 15, with 27 aircraft is Britain's second largest long haul airline operating to 18 airports. It also operates to some of Air India's destinations like New York, Hongkong, Tokyo and Chicago. The point to note, however, is Virgin's profitability, marketability and the unconventional ability to challenge the orthodox aviation market with low-price ticket which has already generatedsufficient heat in the mind of the British Airways, UK's flag airline with a genealogy tracing back to 1919.

Let us now delve into Virgin's Branson's reported remarks, attitude and reaction in Delhi. ``Branson who never takes no for an answer, has a one-point agenda: to begin flights into India ...'' ``We would ultimately love to operate daily services to both Delhi and Mumbai... and look forward to improved service, competitive fares and wider choice of flights.'' ``Together with our support Air India will restore its former glories.'' Compare this with Air India's M Mascarenhas: ``I am delighted about ... code share and marketing partnership arrangements. I look forward to Government approval which will lead to improved product of seats, in-flight service and overall standards.''

The catch is too conspicuous to be missed. Virgin's Branson is a ruthless go-getter who challenges even the established British institution called British Airways which operates to more than 80 countries and 175 destinationswith a fleet of 200-plus aircraft. Virgin, as is well known, resorts to price war. Surely it will do so in future too in India, apparently to compete with the British but inevitably inflicting damage to Air India's revenue. Virgin wants daily direct flights to India and does not take ``no'' for an answer. It proposes to help restore Air India's former glory ``with our support'' and ``experience'' and will also be ``competing with Air India.''

Is there a continuity or contradiction? Or both! How so? ``Maharaja's Mascarenhas, however, is ``delighted'' at Virgin's public snubbing of Air India. So, what is the ultimate outcome? In case the governments of UK and India do not approve of it? If the bilateral air agreements remain unratified and unimplemented, being unimplementable? Does not Air India see the writing (of price war) on the wall? A war which may be successfully fought and won by a young and modern Virgin fleet with cross-subsidisation and cross fertilisation from the numerous Virgin brand products,certainly can never be matched by a pack of fuel guzzlers of Maharaja's stable.

Two controversial scenarios emerge. The first concerning ethics, or the lack of them. Both British and Virgin belong to UK and not India. It would, therefore, be incorrect and unwise for India (Air India deserves to be cautioned) to be seen to passively enjoying one commercial Briton's abuses against rival compatriot from the host's campus. How would India feel if Naresh Goyal of Jet Air goes to British Airways headquarters at London and hurls similar adjectives and ridicules Air India accusing it of sabotaging Jet Air and avoiding competition!

Second, could Branson's tantrum be a way to stall any prospective criticism of handing over the Indian company's exclusive rights and routes to a foreigner on the platter? Does this have prior clearance of the Air India Board and the Government of India? Why is Branson in such a tearing hurry? All the more as the Indo-UK bilateral is scheduled in January 2000? Can Air India's oldaircraft (coupled with faltering commercial wing and exacting agents) compete with the mega British Airways and the marketing skill and the possible price war of the young fleet of the Virgin? Are Virgin and British collectively out to ensure the demise of Air India in its home ground and in the midst of home crowd! Time will tell perhaps.

The high drama of Branson and the media hype notwithstanding, Air India's inept handling of its operation in 1999, of course, is just another example of warped Indian attitudes. Namely, soliciting the help of foreigners to keep local compatriots at bay. Thus, Air India's withdrawal this May from Rome, Manchester and Frankfurt has paved the way for the Europeans to benefit at India's (not Air India's, but India's) cost. The point is that when Indian Airlines wanted to operate to Europe, Air India refused. Air India's MD is obviously more at home with Lufthansa, Alitalia and British Airways rather than with Air India and Indian Airlines. The MD of Air India is now``delighted'' that Virgin's Branson has come to India to do business and restore the ailing Maharaja's ``former glories''.

But who can help Air India, when its own officials decide to withdraw from profitable routes and hand over their expensive rights to foreigners possessing histrionic talent and using intemperate language! Air India, of course, is the only corporate which has discovered how to make profits while shrinking.

In fact, one reason why it wanted to hand over part of its flying rights to Virgin and not to Indian Airlines is possibly the fact that Indian Airlines wouldn't have paid it anything the flying rights, you see belong to the Government which owns both airlines. So, Indian rights to fly to London have gone back to London, the source of all original rights!

The author is an alumnus of the National Defence College of India