From fleet to marketing, Alliance Air plots strategy for life beyond AI

Alliance Air is refurbishing its aircraft cabin, investing in information technology systems and launching a new marketing campaign as it charts its own course after the sale of Air India.

Alliance Air, which was founded in 1996 as a subsidiary of Air India, served as a regional arm of the national carrier and connected tier II and III towns. The airline is now under AI Asset Holding company following disinvestment of the national carrier in January.

Until now, Alliance Air depended on Air India for sales, marketing and financial support. The management is now taking steps to create its own brand identity.

"We are investing around Rs 10 crore in IT infrastructure, passenger service system and software for operations and accounting. By April we will have our own passenger services system (PSS)," said the airline's chief executive officer Vineet Sood.  A PSS covers a wide range of functions including flight scheduling and ticket reservation.

Alliance Air is also planning a product refresh by changing seat cushions and covers in its ATR aircraft fleet and launching a new marketing campaign next month.

The airline has a fleet of 18 ATR-72 aircraft and flies to 51 destinations within the country.  Last month it signed a lease for two smaller ATR-42 aircraft which will allow it to operate optimally to airports with short runways such as Shimla, Kullu, Dharamshala among others. Alliance Air has been operating ATR aircraft for the past twenty years and is its second largest customer in India after IndiGo.

“We see opportunities to expand especially as more routes come up between tier II to tier III and tier II to tier II cities. We have almost 60 aircraft in the Indian market. There is more maturity now in the market which provides more business opportunities,” said Fabrice Vautier, senior vice president (commercial) of ATR.

Apart from the ATR aircraft, Alliance Air has also leased two 19-seater Dornier-228 aircraft from Hindustan Aeronautics Ltd and will deploy them next month to connect remote airfields like Pasighat, Tezu and Ziro in North East India.

While the Dornier-228 has been flown by defence forces, it is being used for commercial air services by an airline for the first time. " It is a tried and tested aircraft. The challenge for us was to have maintenance repair and crew set up for the Dornier planes. We have eight pilots including those on deputation from Indian Air Force and those retired from Coast Guard. We have also tied up with a MRO," he added.

Experts point out that profitability will be a challenge for the airline especially in view of high fuel prices. “Alliance Air has spread itself thin and the ratio of destinations to aircraft is one of the highest in the country,” said Ameya Joshi, founder of aviation blog Network Thoughts.

Sood said the airline has asked the government for equity support and is looking for external funding too but did not divulge details. " We have been operating profitably since last October. January was a difficult month because of the spread of Omicron but business has picked up again in February and March,” he said.