The Tata group is exploring the possibility of a major revamp of Air India. The group is reportedly in discussions with global consulting firm McKinsey & Company to lead a comprehensive overhaul of the airline, which is currently grappling with one of the most severe crises in its recent history.
A top Tata Sons official met a senior partner of McKinsey in Mumbai last week to discuss a revival strategy for the carrier, according to a source. The meeting took place just days after a London-bound Air India Boeing Dreamliner crashed shortly after takeoff from Ahmedabad, claiming the lives of 241 passengers and crew. Only one passenger survived the crash.
“While we do not comment on or publicly discuss details of any client work, it would be inaccurate to report that McKinsey is currently serving the Tata group on a transformation project for Air India,” McKinsey & Company said in a statement to The Indian Express.
However, when contacted, a Tata group official did not comment on the issue.
This isn’t McKinsey’s first engagement with the consulting firm. Its relationship with Air India started almost eight years ago. In 2017, Air India selected McKinsey to help develop its long-term strategic business plan — especially on cash-flow, route networks, marketing strategies and updating its loyalty program.
Watson Farley & Williams (WFW) advised multiple parties on the historic merger of Tata SIA Airlines Ltd (Vistara) with Air India, creating a unified full-service airline under the Air India brand. This followed the merger of Air India group’s low-cost airlines Air India Express and AIX Connect earlier.
The combined entity is now the largest international carrier with more than 90 destinations worldwide and the second largest domestic carrier. The Indian aviation market is the third largest in the world and is one of the fastest growing.
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Founded in 1932, Air India is a pioneer of India’s aviation sector and has developed an extensive global network, becoming a major international carrier. The consolidation of the four Tata-owned airlines into one group is part of Air India’s ongoing, five-year transformation program, Vihaan.AI which is focussed on establishing Air India Group as a world-class aviation company.
Air India reported a lower loss of Rs 4,444.10 crore for FY2024, a significant decrease of 60 per cent compared to the Rs 11,388 crore loss in FY23. The airline’s turnover also increased by 23.69 per cent to Rs 38,812 crore during the same period.
The Dreamliner crash has cast a spotlight on the Tata group’s efforts to turn around the airline, which it acquired from the Indian government in 2022 with the goal of restoring its performance and reputation.
Meanwhile, addressing the Air India employees at its headquarters in Gurugram, Tata Sons Chairman N Chandrasekaran said, “I felt I had to be here and meet as many of you as possible.”
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On his visit to the crash site, Chandrasekaran said, “It was not easy. I’ve seen many crises in my career, but nothing as heartbreaking as this. I never imagined I would face something like this.” No words could undo the loss but reaffirmed Air India’s long-term commitment to those affected. “We consider every person who lost someone in this tragedy as part of our family — now and always,” he said.
Recognizing the emotional toll on employees, he offered words of encouragement: “Criticism will come, especially when you care deeply and work tirelessly to build something great. But I want you to stay strong. When you feel overwhelmed, remember one word: determination.”