Transformative game-changer: Air India aircraft deal

Dipak Kurmi

(The writer can be reached at dipaknewslive@gmail.com)

Air India’s recent purchase of 470 planes from Airbus and Boeing occurred during its efforts to transform into a “world-class proposition,” according to N Chandrasekaran, the chairman of Tata Group, the airline’s owner. This deal surpasses American Airlines’ previous record of 460 planes bought in 2011 and is intended to update Air India’s fleet and facilitate a significant expansion of its network, according to Chandrasekaran. The national carrier, which was bought by the Tatas two years ago, has put most of its older planes to rest and initiated a five-year scheme to renovate its old fleet. The first new aircraft will start operating at the end of this year.

According to experts, the large scale of the new order suggests that Air India intends to reestablish its leading position in the competitive Indian aviation market and gain an advantage in providing services globally. Mark Martin, an aviation analyst, said that Air India’s new plane orders will align its fleet with Lufthansa and Singapore Airlines, which are part of the world’s largest global airline alliance, Star Alliance. He added that this move appears to be a strategic plan to compete against Gulf carriers, who are viewed as an arch nemesis by Star Alliance. Mark Martin, an aviation analyst, thinks that Indian travelers mostly use Middle Eastern airlines like Emirates, Qatar Airways, and Etihad to travel to Europe, US and other parts of the world. However, this trend may shift as Air India’s new planes are put into operation. The purchase of large planes such as A350s will enable Air India to access markets such as the US and Australia through non-stop flights between these countries and India.

These are valuable routes that serve the huge Indian community living abroad. Ajay Awtaney, the founder of an Indian aviation website, LiveFromALounge.com, believes that Air India will face challenges in breaking the monopoly of the Gulf carriers due to their loyal customer base and the ability to start pricing wars. Air India has had customer complaints about poor maintenance, faulty entertainment systems and charging points for many years. The introduction of the new fleet will improve the passenger experience, but the airline is facing a shortage of skilled workers and trained personnel, according to Awtaney. Air India was viewed as the epitome of quality service during the period when it was established by Tatas and prior to its nationalization by the government in the 1950s. After experiencing years of poor management under various governments, Air India’s financial troubles led to a significant amount of debt and unsuccessful efforts to recover its previous success. In 2021, the airline was sold back to the Tatas in a deal worth $2.4 billion (£1.98 billion). This marked the return of Air India to its original owners after a period of 68 years. Jitendra Bhargava, who previously held the position of executive director at Air India, stated to the BBC that these new orders will quiet the critics who were against the airline’s disinvestment.

According to Bhargava, the potential of Air India was not fully realized under government control. Experts suggest that for Air India to achieve its full potential and operate fifth-generation aircraft like the A350s, the company must quickly modernize its operations. This includes upgrading its software systems, maintenance capabilities, and human resources. By doing so, the airline will be better equipped to handle the demands of modern aviation and compete in the market. Martin expressed that if Air India is successful in its efforts, the airline will once again bring India’s distinctiveness to the global market. This will mark a significant return for the country, which has not had a major global presence in the airline industry for many years. In order for Air India to establish a significant global presence, the airline must shift its focus from solely serving passengers originating from India and begin generating more connecting traffic, as suggested by Awtaney. To achieve this, Air India will need to optimize its route network, as well as have improvements made to infrastructure within India. By doing so, the airline can better compete in the global aviation market and expand its reach beyond just the domestic market. The lengthy queues and extended wait times at immigration in Delhi and Mumbai during the winter season indicate that India’s infrastructure is currently unable to effectively handle a substantial increase in passenger traffic. This suggests that improvements must be made to increase the capacity of airports and other relevant facilities in order to better accommodate the needs of travelers. As part of its focus on state-led capital expenditure on infrastructure, India is constructing a minimum of 80 new airports within the next five years. This initiative aims to expand the country’s airport network and improve the overall capacity to handle the growing demand for air travel. The Indian aviation market has experienced a significant rebound since the pandemic, as evidenced by a 48.9% year-on-year growth in domestic air traffic, according to government statistics. The latest data shows that over 122 million Indians took domestic flights in December 2022, indicating a significant recovery in the market and a return of consumer confidence in air travel. According to estimates from the Centre for Asia Pacific Aviation India (CAPA India), domestic carriers in India are expected to play a major role in driving growth in global aviation. The estimates suggest that these carriers will place orders for approximately 1,500 to 1,700 aircraft within the next two years, highlighting the country’s potential to become a significant market for the aviation industry.