Can new CEO Ilker Ayci turn Air India around?

Dubai: Tata Sons’ decision to tap former Turkish Airlines Chairman Ilker Ayci for the role of Air India’s CEO is a calculated move to transform the airline into a world-class one and turn New Delhi into a major aviation hub, industry experts have said.

Those familiar with Ayci’s past know the Turkish aviation veteran’s hiring is a no-brainer.

“He has run a fairly large airline and dealt with labour unions because Turkish Airlines is highly unionised,” said Vinamra Longani, Head of Operations at Sarin & Co, a law firm specialising in aircraft leasing and finance.

“He has worked in the insurance industry and has a finance background. In India, where the aviation sector is highly regulated, dealing with the government is a part and parcel of every airline C-level executive,” said Longani.

Ayci, who was the chairman of Turkish Airlines until last month, has worked closely with the government there. In 1994, Ayci was also the advisor of Turkey’s President Recep Tayyip Erdogan, who was then the mayor of Istanbul.

“These skill sets will definitely help him and the idea is to make Air India a world class airline that hubs out of Delhi and not just be limited to the region,” said Longani.

Early days of Ilker Ayci

Born in Istanbul in 1971, Ayci was an alumnus of the country's first private varsity, Bilkent University, Ankara. He graduated from the Department of Political Science and Public Administration and is fluent in Turkish, English and Russian.

Following a research stay in political science from the Leeds University in the UK, he completed his Master's in international relations from the Marmara University in Istanbul.

He has held several positions with the Istanbul Metropolitan Municipality.

Ayci also served as the CEO of several insurance companies.

In January 2011, he took over as the President of the Prime Ministry Investment Support and Promotion Agency of Turkey.

In 2013, he was appointed Vice-President of the World Association of Investment Promotion Agencies of which he later became the Chairman and served till 2015.

Ayci was appointed chairman of Turkish Airlines in 2015 and the following year described his firm as "one of the most profitable airlines in the world" over the previous decade.

The pandemic plunged the airline into losses of $836 million in 2020, but it returned to profit in the first nine months of 2021, with analysts crediting a focus on freight cargo and cutting employee costs, AFP reports.

In a CEOWorld Magazine column last year, Ayci said his airline had achieved "what most other airlines could not" by cutting costs and capital expenditure during the pandemic.

Ayci, 51, stepped down from his Turkish Airlines post last month.

Air India to retain employees for one year

Ayci will have the pressure to produce some quick results after taking over in April. Air India, which reportedly loses more than $2 million every day, will need to enhance its offerings and make its operations leaner. Tata has agreed to retain Air India employees for one year, which means the new management will have to focus on other areas to reduce expenses.

“As far as quick returns go, they're already trying to focus on an enhanced meal service - there is a renewed focus on on-time performance,” said Longani. “They are making sure that the basics are taken care of.”

Tata’s global brand approach

Although Tata has come under some criticism back in India for its CEO choice, the move once again highlights the company’s international approach to running its companies.

The conglomerate operates its domestic full-service carrier – Vistara – in partnership with Singapore Airlines, considered to be one of the best carriers in the world. Tata acquired Jaguar Land Rover from Ford in 2008; since then, the British luxury brand has doubled its sales and opened new factories.

“Air India is no longer synonymous with India, it is owned by the Tatas and they are a global brand,” said Mark Martin, CEO of Martin Consulting, an aviation consultancy.

New Delhi a new aviation hub?

Ayci’s appointment has caused some to speculate that Air India might be aiming to turn Istanbul, one of the world’s busiest airports, into a regional hub.

“I believe this is a well thought-out strategy. Do we read into this that Istanbul Airport will be another big hub for Air India in future?” said an airport official on LinkedIn. “On top, fuel price could be another factor to make Istanbul another hub for transatlantic flights”

But, the current geopolitical situation makes such a partnership difficult.

“He has been brought in just for his expertise,” Longani said.

Challenge of transforming Air India into a long-haul carrier

Fixing the balance sheet is one thing, but transforming the airline into a formidable long-haul carrier would be a different challenge.

Industry analysts said Air India will aim to reclaim routes to Africa and SouthEast Asia that are currently dominated by Gulf carriers. “We will see the new Air India going head to head with Middle East carriers – in the past, the airline had a mega passenger network and that’s going to come back,” said Martin.

- with inputs from AFP and IANS