Ahmedabad Tragedy Could Put Brakes on Air India's Revamp

The crash of the London-bound Air India flight in Ahmedabad on June 12 that left more than 265 dead could slow the erstwhile national carrier's plans to expand and revive its reputation and profitability.

- Rohini Mohan

BENGALURU —

This is because it must turn its attention now to restoring internal morale and consumer confidence after the tragic accident.

Officials are still investigating why AI171 crashed, but it is the airline's first wide-body aircraft accident in 40 years.

The Tata Group bought the carrier from the Indian government in 2022.

For Air India, which posted an operational profit in early June after decades of losses and hoped to reach full profitability by 2027, the crash changes many plans.

The incident could result in significant losses for Air India not only because all except one of the 242 passengers were killed, but also because the airline may be held liable for the plane's plunge onto a medical hostel in a residential area.

After the accident, Tata Sons chairman N. Chandrasekaran announced compensation of 10 million rupees (S$148,900) to the families of each person who lost their life.

He also promised to cover the medical expenses of those injured and help reconstruct the B.J. Medical hostel the plane fell on.

The airline is suffused with nostalgia with its turbaned Maharaja mascot and delicious Indian meals, and unsmiling but efficient crew.

In recent years, however, it has become a butt of passenger ridicule for persistent delays, poorly maintained planes and years of losses.

Under Tata ownership, Air India's chief executive Campbell Wilson is helming a five-year intensive transformation plan beginning in 2022 to revamp an ageing and outdated fleet, upskill staff, upgrade IT systems, and create a world-class airline on a par with rivals like Emirates.