Air India: How the historic plane deal alters the playing field

flight with Air India

The record purchase of 470 aircraft by Air India from Airbus and Boeing comes as the airline strives to establish itself as "a world-class proposition," in the words of N Chandrasekaran, chairman of the Tata Group, which owns the airline.

These orders, which surpass the 460-plane deal made by American Airlines in 2011, would modernize Air India's fleet and enable it to "dramatically" expand its network, according to Mr. Chandrasekaran.

The troubled national carrier, which Tatas purchased roughly two years ago, has retired the majority of its older aircraft and started a five-year plan to update its aging fleet. At the conclusion of this year, the first new aircraft will enter service.

According to experts, the size of this new order shows Air India's desire to retake the lead in India's competitive aviation market and gain a competitive advantage to serve the rest of the world.

According to aviation analyst Mark Martin, "These orders directly synergize Air India's fleet with Lufthansa and Singapore Airlines -- all members of Star Alliance, the world's largest global airline alliance.". "To me, it appears to be a comprehensive strategy to counter the hegemony of Gulf carriers, for whom Star Alliance has long been a bitter foe.".

For international connections to Europe, the US, and other parts of the world, Indian travelers currently rely heavily on Emirates, Qatar Airways, Etihad, and other Middle Eastern airlines. As the new fleet for Air India is put into service, Mr. Martin thinks that could change.

Air India will be able to directly enter markets like the US and Australia through the purchase of wide-bodied aircraft like the A350s thanks to nonstop flights between these locations and India. These are profitable routes to serve the significant Indian diaspora that is present abroad.

Ajay Awtaney, founder of the India-focused aviation website LiveFromALounge . com, asserts that it will be difficult to break the monopoly of the Gulf carriers given their "loyal base" and capacity to start price wars.

Air India's Boeing 787 Dreamliner
Consumer complaints about Air India's poorly maintained cabins have been a constant problem.

Consumer complaints about Air India's poorly maintained cabins, broken charging stations, and broken entertainment systems have dogged the airline for years. Although the new fleet will provide customers with an "improved experience," Mr. Awtaney claims that there is still a need for trained personnel and human resources.

Air India was regarded as the industry leader in customer service for many years after it was established by the Tatas and before it was nationalized by the government in the 1950s.

But after 68 years, Air India was returned to the Tata family in 2021 after being sold to successive governments for years due to poor management, mounting debt, and failed attempts to restore its former glory. This marked the airline's homecoming. .

"These orders will put an end to the disinvestment skeptics of Air India. According to Jitendra Bhargava, a former executive director at Air India, "its potential was untapped under the government.

But according to experts, the carrier will need to quickly modernize its operations, including software systems, maintenance, and human resource capabilities, if it hopes to fully realize its potential and operate fifth-generation aircraft like the A350s.

If they are successful, Mr. Martin said, "they will bring India's distinctiveness to the world once more, after many years.".

Air India will need to broaden its focus "beyond just India originating passengers and generate more connecting traffic" though if it wants to have an impact on the world, Mr. Awtaney added. It will need to optimize its route network for this, and India will also need to upgrade its infrastructure.

Passengers queue outside an airport in India
After the pandemic, the Indian aviation market experienced a rapid recovery.

India doesn't yet have the capacity to handle a significant increase in passenger traffic, as evidenced by the snaking lines and protracted waits at immigration in Delhi and Mumbai during the winter.

But as part of its focus on state-led capital expenditure on infrastructure, the nation is building at least 80 new airports over the next five years.

Following the pandemic, the Indian aviation industry experienced a rapid recovery, with domestic traffic increasing by 48.9% year over year, according to government data. According to the most recent data, more than 122 million Indians flew domestically in December 2022.

According to estimates from the Centre for Asia Pacific Aviation India (CAPA India), India is also anticipated to play a significant role in driving growth in the global aviation industry, with domestic carriers placing orders for 1,500–1,700 aircraft over the next two years.

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