Back in the day, the interference of politicians and bureaucracy in the affairs of Air India was a known thing. It was a done deal that the airline would be paid money for the Economy class ticket, however these wielders of power would fly Business Class at the minimum, because by some sort of stroke of luck, they would get upgraded all the time!

I’ve heard this practice went off under the current government. However, it was rampant over the years. Since Air India is treated less as a commercial enterprise and more as a fiefdom by many, a member of the Parliament, yesterday wanted to know from the Government, about how many other people are getting upgraded, if not them. Also, they wanted to know the criteria for upgrade.

Here is the question, via the Parliament website:

Will the minister of Civil Aviation be pleased to state:

a) Whether any criteria/procedure has been laid down in the Air India to upgrade passengers to a higher class, if so, the details thereof and the number of upgrades reported during the last three years and current year, year wise

b) the reason for such an upgradation

c) the competent authority to take a decision in such a matter

d) the revenue foregone by Air India in this regard annually

e) the measures taken by the Government to check such Arbitrary and high number of upgrades

I do wish to have a hearty laugh at the question itself. Here is a member of Parliament, whose salary gets paid partly via my taxes. He perhaps does not know the number of upgrades done in Air India over the past few years, but he does know that the number is high and the upgrades are arbitrary. Yawn! He was perhaps just pissed that his MP reimbursement does not get him the best seat anymore, or Air India operates all-economy planes on several routes.

Anyhow, the answer had at least as much it hid as much it showed. The answer from the Civil Aviation minister was:

(a) to (c): Yes, Madam. Up-grades are carried out by Air India on the following grounds:

i. On payment of the prescribed amount by the passengers;

ii. Up-grades done by Air India during overbooked flights;

iii. Up-grades done on other commercial considerations;

These up-grades are done subject to availability of higher class seats and payment of the prescribed amount by the passenger where ever applicable.

Such up-grades are done by the authorised executives of Air India at different levels depending upon the nature of up-grade.

The details regarding the number of up-gradations reported during the last three years and current year, year-wise are as follows:

Year         Total No. of pax       No. of pax upgraded    % of Total pax upgraded

2013-14         15410000                   128174                           0.83

2014-15         16870000                   105594                          0.63

2015-16         17000000                   84894                           0.50

April 2016        1582223                      7533                          0.48

(d) & (e): Up-gradations are done subject to availability of seats in the higher class and no revenue paying passenger is displaced and, therefore, there is no revenue loss to Air India. In view of this, there is no revenue foregone by Air India.

Upgrade % on Air India going down

There are two things I take away from this answer. First and foremost, the number of upgrades as a percentage of passengers is going down per annum (0.83% to 0.48%). This is a good and bad thing for Air India.

One reason it is good is because perhaps the freeloader upgrades are going away to an extent. However, I am not sure if this counts staff travel. I’ve seen last year on a couple of occasions Air India staff in J class while they were ticketed for Y class (spotted their boarding passes!).

When people are paying for an upgrade at the Airport, they are paying hard cash to travel in a better seat, so it is in the best interest of the airline to sell the seats for cash as long as they are available. And when people want to redeem miles for an upgrade, it is good as well, because miles are a liability on the airline balancesheet, and in this exercise some of these miles are expunged in exchange of free capacity on the airline.

This is a bad thing as well. Air India has recently been making changes to their upgrade process. This has included limiting the transferability of the upgrade voucher to the elite members itself rather than family or friends. This must have been a part of the reason where upgrade instruments reduced.

Additionally, a lot of members never got their kits in the first place because Air India took half of the last year to process them. For me, I still haven’t received my Golden Edge kit for May 2015-April 2016 despite numerous follow ups with the airline.

Additionally, it means not enough people are paying for, or are aware of the Get Upfront offer, or the Upgrades against miles offer. A lot of people, heck, do not even see benefit in the Air India program anymore given their miserly approach towards issuing miles.

Bottomline

Air India is now profitable, and it is coming through back to profitability in part because the practices that existed in Air India before are now getting out of the way. They still have a lot of bureaucratic approach towards stuff to be done, but they are on track. However, they do need to have a better approach towards their loyal travellers by giving them a better deal rather than just 10% miles on some tickets!!!!

What do you guys glean out of this information? Have you ever been displaced from your paid J or F seat to accommodate an arbitrary upgrade?

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