Air India has finalized one of the most significant aircraft orders in history. The airline has now agreed to purchase almost 500 new aircraft, including 250 Airbus, divided between 210 single-aisle A320neos and 40 widebody A350s. Boeing's order included 220 aircraft, including 190 narrowbody 737 MAX jets and widebodies, 20 of the 787, and 10 777Xs.

Boeing finalized its portion of the order on January 27th. However, Air India only signed the agreement on Friday, February 10th.

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Aims of a new, modern Air India

The order is part of the airline's key strategy of modernizing Air India's aging fleet while focussing on its market share to international destinations. With India's large population and global overseas diaspora, the airline aims to capture back its local passengers that frequently travel with Middle Eastern carriers such as Emirates and Qatar Airways.

Looking at the list price, the order is set to be worth over $150 billion. Deliveries are expected to be over the next eight years.

Taking on the domestic market

With the narrowbody component of the order being 400 aircraft, Air India also hopes to take on local rival IndiGo, which has a stronghold on domestic operations. Air India's latest order resolidifies itself in the big leagues as it looks to rejuvenate the airline's image.

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Four airlines into two

With TATA's plans to shake up the Indian aviation market and regain up to 30% market share, Air India Express and AirAsia India will merge as part of its plan to create a mega Indian low-cost carrier, in which the latest order of 190 Boeing 737 MAX, to play an integral part of this operation.

Meanwhile, Vistara and Air India will merge and aspire to lead international operations. All of its widebody orders fall into this division of the business (40 x Airbus A350, 20 x Boeing 787, and 10 x Boeing 777X). The remaining Airbus A320neos are also planned to operate the reimagined carrier's short-haul international destinations.

Under TATA's stewardship

In the past year since TATA's takeover, the carriers have seen a 27% increase in utilized aircraft, which is now sitting at 100, with continued injected funds by conglomerate TATA, Air India MD-CEO Campbell Wilson commented on current operations:

''The number of daily flights has increased by 30%, and weekly international services have risen 63%. Sixteen new international routes have been started or announced (to be launched shortly), and frequency on nine existing ones have been increased. Average daily passengers have risen by 72%, and daily revenue has doubled. Average daily frequency has 81%''.

Given AI's fragile past, this order is historic. Besides the likely possibility of being the first Indian carrier to fly the Airbus A350s, Air India last made a purchase in 2005 for 111 aircraft, including 43 from Airbus and 68 from Boeing. The deal at that time was worth an estimated $10.8 billion, so this rejuvenation is well overdue.

Sources: Reuters, Times of India

• 

  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