Air India's brand equity dented by Rs. 800 cr in trying to save Rs. 8 cr, say experts

Air India's brand equity dented by Rs. 800 cr in trying to save Rs. 8 cr, say experts

Author | Venkata Susmita Biswas | Tuesday, Jul 11,2017 7:37 AM

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Air India's brand equity dented by Rs. 800 cr in trying to save Rs. 8 cr, say experts
Air India has earned the wrath of its passengers for a multitude of reasons. Adding to this laundry list is the national carrier’s decision to not serve non-vegetarian meals to its Economy Class passengers flying domestic routes. Experts say that this decision is sure to dent the brand equity of the national carrier. “The damage to the brand equity of Air India is probably Rs. 800 crore,” says Saurabh Uboweja, brand-guru and CEO, Brands of Desire. 
 
Air India declared on its official Twitter handle that the move will help cut cost, reduce food wastage and avoid mix-ups of vegetarian meals with non-vegetarian meals. According to estimates, this decision may save Air India Rs. 8 crore annually. Air India has a total debt of Rs. 52,000 crore. 
Bad Timing
 
This announcement comes just around the time when the government is trying to unburden itself from the Rs. 52,000 crore debt and privatise the national carrier. Experts say a move like this, at such a crucial time, is not the best thing to happen to the debt-ridden carrier. Commenting on the timing of the move, N Chandramouli, CEO, TRA, says, “An unnecessary controversy like this gives the negotiator (who is buying the airline) a higher hand as the brand value of the company definitely dips.” 
 
Harish Bijoor, Brand-Guru and Founder, Harish Bijoor Consults, also felt that the timing of this announcement was bad and that the move is bound to impact the brand equity of the airline. He felt that the airline should have gone ‘totally vegetarian.’ “Or even better, vegan, and that would be a positioning stance. Not this. This is redefining "cattle-class" and underlining the fact that there is a class-system that says that only Business Class folk deserve non-vegetarian, and the rest don't,” he says. 
 
“In addition to coming at a very wrong time in the airline’s journey, this move has been a PR disaster,” says Uboweja.
 
Justification Insufficient
 
Air India has received a lot of flak online for the reasons it has cited for changing their meal options. The motivation behind the decision can be easily questioned “because when a carrier has a debt to the magnitude of tens of thousands of crores, skipping non-vegetarian food is not the way to save Rs. 8 crore,” says Uboweja. “None of the reasons will justify the move for an airline that is constantly struggling to stay afloat,” he adds. 
 
Bijoor felt that had Air India said that free food served in-flight will be vegetarian and paid food will be non-vegetarian they would have gotten away with it. “But they may not get away with this!” he exclaims.
 
Political Sentiment
 
Given the current socio-political scenario, this move drew a lot of ire on social media platforms. People accused the national carrier of furthering the government’s agenda. 
Experts say that while not all brands need to be conscious about the food they serve, it is important for the national carrier to not make miscalculated moves like this one. “If the Parliament House was to announce that it will only serve vegetarian food, that would be definitely controversial even though there are only a thousand people who may be directly affected,” explains Chandramouli. “A move like that makes a statement of sorts. Anything connected to the government should definitely be seen with sensitive eyes. It may be easily misconstrued as toeing an agenda,” he says. 
 
Both Bijoor and Uboweja feel that the airline may roll back the decision. “I guess it will roll back the non-veg food out of Business Class. That’s more likely that than anything else,” says Bijoor. 
 
While Air India was fighting fire, Air Vistara reached out to customers reassuring them about food available on board the airline. Air Vistara, a joint venture between Tata Sons and Singapore Airlines, tweeted that it does not discriminate and offers the choice of having non-vegetarian food on board the flight.

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