LONDON – With today’s blockbuster order with Airbus and Boeing in mind, we ask the following question: Is Air India destined for a brighter future?
Through the transformation program dubbed Vihaan.AI, today’s mega aircraft order is part of the ongoing plans that owners of TATA have for the airline.
This piece will recap today’s blockbuster orders, as well as why Air India is destined for a brighter future.
Air India’s Commitment to Airbus…
Airbus started off proceedings of the Air India blockbuster order today with a commitment to order 250 aircraft from the European planemaker.
This is broken down as follows:
- 140 A320neos.
- 70 A321neos.
- 34 A350-1000s.
- 6 A350-900s.
Deliveries of the A350-900s are expected to begin by the end of this year.
Airbus’ sales chief Christian Scherer said the following on the order:
“This is a historic moment for Airbus and for Air India. India is on the verge of an international air travel revolution, and we are honored that our partnership with the Tatas and our aircraft solutions will write that new chapter for the country’s air connectivity”.
“The A350’s unique capability will unlock the pent-up potential of India’s long-haul market, its technology, long reach, and second-to-none comfort will enable new routes and passenger experience with better economics and enhanced sustainability.”
“Alongside the A350s, the A320 Family fleets will be the efficient, versatile asset to continue democratizing and decarbonizing air travel in the country – from domestic, regional, up to international levels.”
Air India’s Commitment to Boeing…
Later that day, Air India announced its Boeing portion of the order, with commitments for up to 290 aircraft.
This is broken down as follows:
- 190 Boeing 737 MAXs (Options for 50 more) – Mix of -8s and -10s.
- 20 Boeing 787-9 Dreamliners (Options for 20 more).
- 10 Boeing 777Xs.
Commenting on the deal was Boeing Commercial Airplanes President & CEO Stan Deal:
“Air India’s selection of Boeing’s family of passenger jets shows their confidence in our products and services in the world’s fastest-growing aviation market, and their decision will support engineering and manufacturing jobs at Boeing factories in Washington state, South Carolina and across our supply base”.
“With the industry-leading fuel efficiency of the 737 MAX, 787 Dreamliner, and 777X, Air India is well positioned to achieve its expansion plans and become a world-class global airline with an Indian heart.”
Blockbuster Order Aligns With Vihaan.AI…
It remains clear that this major order from the airline is a good reflection of how Vihaan.AI aligns with the overall goal of the airline “becoming a world-class global airline with an Indian heart”.
Vihaan.AI focuses on the following five pillars for future success within the airline:
- Exceptional customer experience.
- Robust operations.
- Industry-best talent.
- Industry leadership.
- Commercial efficiency and profitability.
This aircraft order will no doubt fall into the “Robust operations” and “Commercial efficiency and profitability” sections of these pillars.
The new aircraft will provide the efficiencies that Air India will need, especially with the current age of their older aircraft at this time.
For the Indian carrier, the more efficient the airline is, the more profitable it can become.
In the context of newer-generation aircraft, this would be reductions in carbon emissions and fuel costs moving forward.
Expanding on this was Mr. N Chandrasekaran, the TATA Sons and Air India Chairman, who referred to Vihaan.AI in today’s blockbuster order:
“Air India is on a large transformation journey across safety, customer service, technology, engineering, network, and human resources”.
“Modern, efficient fleets are a fundamental component of this transformation. This order is an important step in realizing Air India’s ambition, articulated in its Vihaan.AI transformation program, to offer a world-class proposition serving global travelers with an Indian heart”.
“These new aircraft will modernize the airline’s fleet and onboard product and dramatically expand its global network”.
“The growth enabled by this order will also provide unparalleled career opportunities for Indian aviation professionals and catalyze accelerated development of the Indian aviation ecosystem”.
Air India Has A Good Chance of Future Success…
Within this blockbuster order and Vihaan.AI, it remains clear that if Air India sticks to its guns on this, then it has a strong chance of success on the back of a turbulent couple of years.
From failed privatization attempts to COVID-19 putting a further strain on the carrier and its recent customer service backlash, it hasn’t been an easy few years for the airline.
Upon the acquisition of Air India by TATA in January 2022, work got underway to give the airline a complete rethink in the interest of profitability and long-term success.
Critics of this aircraft order may say that this is too late for Air India, as we will expand on more below.
The Competition in India…
Air India’s competitors, such as SpiceJet & IndiGo, have been taking advantage of Air India’s past few years of trailing behind.
IndiGo, for example, is operating around 1,700 flights based on seven-day rolling averages provided by RadarBox.com.
SpiceJet is operating around 242 flights, based on the seven-day rolling average. Whilst this carrier still has work to do in restoring pre-pandemic operations, the carrier is on its way to achieving this.
If anything, it is the IndiGo argument that needs to be emphasized. While Air India will have more international spread than its low-cost competitor, the domestic network needs to be bolstered further.
RadarBox: Air India Approaching Pre-Pandemic Flight Movements…
Data from RadarBox.com shows that the acquisition of Air India in January 2022 by TATA is having an effect already on the number of flights they are operating.
For February 12-19, the Indian carrier is expected to handle 380 movements, based on the seven-day rolling average provided by the flight tracking company.
This represents an increase of 22.19% compared to the same period last year when 311 movements were recorded.
As expected, this also represents a considerable increase compared to 2020 and 2021’s figures, when COVID-19 was rife globally.
The airline is not far from achieving pre-pandemic levels, with Air India needing to find around 51 movements to match that number.
Below is the last four weeks’ worth of data from the carrier:
|Date||2019 Numbers||2022 Numbers||2023 Numbers||Percentage Difference (2023 vs. 2022)|
|January 15-22||425 movements||300 movements||364 movements||+21.33%|
|January 22-29||437 movements||302 movements||369 movements||+22.19%|
|January 29-February 5||424 movements||309 movements||377 movements||+22.01%|
|February 5-12||438 movements||315 movements||378 movements||+20.00%|
The last four weeks’ worth of data shows strong performance compared to the same period in 2022, as well as a slow but steady path to getting closer to 2019 levels.
With Air India and the addition of its new aircraft, we can expect these numbers to rise in the years ahead, including the exceeding of pre-pandemic levels as well.
It remains clear that Air India is slowly but surely getting itself set up for success, both in the short-term, but also in the long term.
Ahead of its first A350-900 delivery by year-end, it’s going to be interesting to see whether this will result in new routes this early or whether the initial focus is fleet renewal.
It may be too early to judge whether Air India is destined for success as that is totally dependent on how the new deliveries will be utilized.
But under the helm of TATA, the focus will be producing a legacy carrier that had the status it used to have many years ago whilst finding that correct balance between excellent customer service and a strong financial position.