Air India’s aircraft shopping doesn't turn out to be what was expected

(Representative Image: Suneesh Kalarickal)

Air India has finally placed an order for planes. But it’s a far cry from what was expected and caters only to the Airbus part of the order.

The Tata Group airline announced the purchase of 210 A320neo planes and 40 A350 aircraft at an online press conference along with Prime Minister Narendra Modi and French President Emmanuel Macron.

The 250-aircraft deal with Airbus is smaller than IndiGo’s order for 300 aircraft about three years ago but marks the entry of the A350 in India’s aviation sector and Airbus’ debut in the widebody segment in the country, a market dominated by Boeing.

There has been continuous speculation over an aircraft order by Air India since July 2022, with a large section of the media reporting that it would be announced at the Farnborough Air show. Neither did it happen at the air show, nor immediately after. And, it’s not clear when the Boeing order will be placed.

The Air India group’s current fleet comprises primarily A320 family aircraft for Air India, Vistara, and AirAsia India, and Boeing 737NG for Air India Express. The group has 45 widebody aircraft in its fleet, all Boeing.

The airline has already announced that a mix of A320 family aircraft and Boeing widebody (B777-200LR and B777-300ER) will join the fleet in stages in 2023. While the narrow-body aircraft will be new, the wide-body planes will be from the used aircraft market.

IndiGo’s order for 300 planes with Airbus in 2019 comprised of A320neo, A321neo, and A321XLR. This took IndiGo’s total order book to 730 planes.

Airbus’ order and deliveries listing shows IndiGo operated 24 A320ceo, 163 A320neo, and 78 A321neo aircraft at the end of December. There are 181 A320neo and 312 A308neo (including the XLR) on order. The airline also operates ATR72-600s.

In the culmination of this exercise, Air India has signalled continuity for its full-service arm and massive expansion of its low-service arm.

The order

The Airbus order comprises 210 A320neo family aircraft, which will end up replacing the A320ceo family aircraft of Air India. Vistara, which will merge with Air India by March 2024, operates a “neo” fleet. This will help with fuel savings and additional range.

It is unclear what the split between A320 and A321 will be and whether the group is opting for any LR or XLR version of the A321neo.

Such a large order?

Data shows that air traffic in India has doubled in the 10 years since FY13 and so has the fleet size. Air India’s order takes care of two things – fleet renewal and replacement along with growth. But the numbers are indicative of a few more things.

Vistara’s merger with Air India would mean that the airline already has a good mix of new-generation “neo” aircraft.

The 40 A350s will help open new routes, offer a new product, and help replace some of the B777s in due course.

When the Boeing order is announced, one will know if Air India will opt for the Singapore Airlines-Scoot model of operations. With CEO Campbell Wilson coming in from Singapore Airlines and its subsidiary Scoot and the SIA group invested in Air India, this could be a real possibility.

The airline wants to be a carrier of choice and understandably get into multiple codeshares and interlines, including inheriting those of Vistara. This will be in addition to expansion on its own.

Going by the current global trends, all these aircraft could well come with a premium economy section, given that the airline has decided to shelve the small first-class cabin since it is not available on all types of aircraft.

For Airbus, the struggle was to find slots for its A320 family and the possibility of losing potential orders for lack of delivery slots.

All ambitions are good if they are profitable. For everyone waiting for a mega order, this has been no short of a damper. All eyes are now on the Boeing part of the deal – when it is announced or if it is announced at all at this stage.