Just over ten days after Air India signed one of the biggest aircraft deals in aviation history, the buzz is yet to die down. With confirmed orders for 470 jets, including 70 widebodies, the carrier has clearly shown its intent to become a major force in international flying. As the once-great carrier goes through its revitalization, let's take a look at why this deal is necessary to kick-start Air India 2.0.

Taking back the market

Exactly 13 months after Air India moved from being a government-owned firm to one owned by the Tata Group, the carrier has finally placed its mega order. This deal has been in the works for months now, with Boeing, Airbus, GE, and Rolls-Royce all involved to grab a piece of the $68 billion pie.

Considering Air India's last major order was in 2006, for a paltry 68 jets in comparison, this change was long overdue. The carrier had been flying under capacity to most of its domestic and international destination, hoping to only target the highest earning routes. This opened the door to foreign carriers taking a lion's share of the market, led by the Middle Eastern giants, Emirates, Qatar, and Etihad, and European ones like British Airways, Lufthansa, and more.

Air India A320neo
Photo: Airbus

On the domestic front, AI was reduced to a fraction of the market, commanding under 10% of the low-margin but high revenue sector. To make matters worse, an estimated 319 of 340 routes were operating at a loss (per the Ministry of Civil Aviation in 2020, reported in PaxEx) straddled by expensive leases, overhead costs, and low passenger revenue.

Things had to change, and fast, which is exactly what Tata is aiming to do with its mega order.

Large fleets = lower costs

It's no secret that aviation is a game of scale, with more aircraft bringing down maintenance costs for the whole fleet. Indeed, flying three 777-200LRs or 25 737-800s was hurting the carrier more than helping it, forcing it to buy expensive spare parts and unable to build massive facilities for itself.

This all changed with the new order, which features 190 Boeing 737 MAXs and 210 Airbus A320s on the narrowbody front. This will jumpstart Air India's efforts to in-house maintenance and bring down operational costs substantially. For widebodies, another 20 787-9s are on their way, bolstering Vistara's existing order, as well as a whopping 40 A350s (six -900s and 34 -1000s), the new flagships of the fleet.

Airbus A350-1000 In Hangar
Photo: Chittapon Kaewkiriya/Shutterstock

The fleet commonality will be crucial to bringing profits back to the flag carrier and providing a consistent passenger experience onboard. So what about the passengers?

An airline worthy of its name

For those of us in the cabin, the new aircraft will be a huge leap forward from the current interiors. A lack of care has meant all cabins feel dated and the hard product is quickly falling part. To remedy this, Air India is investing hundreds of millions of dollars to refurbish its existing 787s and 777s to ensure a consistent product across the fleet once new deliveries commence as well.

We currently have no news on which cabins the airline has picked for economy, premium economy (new!), business class, and first class for the new A350s, and 787s. Yes, you read that right, first class is staying at Air India, but it's unclear how many planes will feature the cabin, with the larger A350-1000s and perhaps the 777X in the future being the most likely. Either way, passengers are in for a much more comfortable journey.

Boeing 777X
Photo: Boeing

Building back the reputation of Air India is a mission from the ground up, so it will be years before we see it become a world-class airline again. However, with input from industry giants like Singapore Airlines (25% stake), expect to see the passenger experience be one of the things to improve first.

Are you excited to see Air India's new jets? Let us know in the comments!

Source: PaxEx

  • Air India Tile
    Air India
    IATA/ICAO Code:
    AI/AIC
    Airline Type:
    Full Service Carrier
    Hub(s):
    Delhi Indira Gandhi International Airport
    Year Founded:
    1946
    Alliance:
    Star Alliance
    CEO:
    Campbell Wilson
    Country:
    India
    Region:
    Asia