Air India, which the Tata Group owns, announced in February that it will be making the largest passenger aircraft acquisition ever from Airbus and Boeing. The transaction involves the purchase of 470 aircraft, including 40 brand-new and next-generation Airbus 350s, 20 Boeing 787s, 10 Boeing 777-9s, 210 Airbus A320/A321 Neos, and 190 Boeing 737 MAX single-aisle planes. As the global aviation industry continues to recover from the outbreak of the Covid-19 virus and the geopolitical unrest generated by Russia’s military activities in Ukraine, this is also the first major aircraft order that a global carrier has announced.
In a statement to the media, the chairman of Tata Sons and Air India, N Chandrasekaran, said that the order is an important step in realising Air India’s ambition, which is articulated in its Vihaan.AI transformation programme, to offer a world-class proposition serving global travellers while maintaining an Indian heart. The addition of these brand-new aircraft will result in a significant expansion of the airline’s global network and a modernisation of its fleet.
Late in the year 2023 is when the first of the brand-new aircraft will be put into service, with the remainder coming by the middle of 2025. In the interim, Air India has begun the process of obtaining ownership of 11 leased B777 aircraft and 25 A320 aircraft in order to expedite the expansion of its fleet and network.
Another noteworthy facet of the transaction is how the aircraft’s engines will be distributed. All single-aisle aircraft will have CFM engines installed, resulting from a partnership between Safran Aircraft engines and GE Aviation. The engines for the A350 aircraft will be manufactured by Rolls Royce, based in the United Kingdom. The engines for the B777/787 aircraft will be manufactured by GE Aerospace, which is based in the United States.
With this order, the newly re-privatised airline aims to become a key participant in global aviation. A big merger is also contributing to the realisation of this lofty goal. Air India is collaborating with rivals Vistara and AirAsia India, with the latter integrating with Air India Express. Also, Singapore Airlines will become a significant Air India shareholder, owning a fourth of the company’s shares.
How will the newly expanded Air India plan to deploy its new aircraft?
Many new planes will be used to replace the jets that are now in service. According to Cirium Fleets Analyzer, Air India currently operates a fleet of only 213 aircraft, which includes Vistara, Air India Express, and AirAsia India. But, there are only 46 of these that are widebodies. This is much less than the 500-plus planes that the firm just ordered.
Some of the new planes will be replacements for older aircraft. Nonetheless, many others will inevitably be used for growth, including worldwide growth.
The Airbus A350 and Boeing 777-9 are widebody aircraft that will most likely be used on ultra-long-haul routes.
The top 5 of the most grossing routes for Air India in 2023 Q1 include London Heathrow, Delhi – San Francisco, Delhi Chicago O’Hare International Airport, Delhi – Newyork John F. Kennedy International Airport and Delhi – Toronto. US, UK, Canada, Australia, Germany, Paris, Singapore and UAE (Dubai) are among the top-grossing routes for Air India.
It is important to note that the principal international hub for Air India is not in Mumbai but rather in Delhi. Twelve of the top twenty international destinations Air India serves originate from Delhi. Only five routes originate from Mumbai. Other origin destinations are Bengaluru and, surprisingly, Kozhikode. According to an article published by Cirium in July 2022, when it comes to foreign travel, Delhi is busier than Mumbai. This is not the case with all international airlines that have flights to India. Emirates, British Airways, and Singapore Airlines, amongst others, have increased their capacity to serve Mumbai. On the other hand, this is offset by the fact that other carriers, including Lufthansa, Qatar Airlines, Thai Airways, and Virgin Atlantic, have more focused strategies on Delhi. Over the past ten years, Air India has added more seats departing from Delhi than from Mumbai. Vistara Airlines, which TATA also controls, currently views Delhi as its most lucrative market. SpiceJet and GoAir, examples of low-cost airlines, are impacted identically.
FM traffic, a technique within Diio by Cirium, determines potential Air India expansion areas. It demonstrates, for example, that many of its Delhi-New York passengers continue to Dallas-Fort Worth (DFW). As a result, the airline may deploy some of its new widebodies to launch a new DFW nonstop. Or, given Air India’s Star Alliance ties to United, Houston is a better option. Will it offer more routes to Europe? What about East Asia? Africa? The next decade will be fascinating.