Tata Group-owned Air India has announced the biggest ever aviation deal in the history of civil aviation. Indian Carrier Air India’s record deal for 470 planes from Airbus and Boeing has happened at a time when the carrier plans to become “a world-class proposition“. The deals were announced during interactions between the Tata leadership along with Prime Minister Narendra Modi and French President Emmanuel Macron and US President Joe Biden separately. These orders beat American Airlines’ 460-plane deal in 2011. The troubled national carrier, which was acquired by Tata about two years ago, has retired most of its older aircraft and launched a five-year plan to modernize its fleet.
Who is Air India?
Air India is the flag carrier airline of India, headquartered in New Delhi. It was founded by J. R. D. Tata as Tata Airlines in 1932. Air India operates a fleet of Airbus and Boeing aircraft serving domestic and international destinations. Air India is the largest international carrier in India with an 18.6% market share. The airline became the 27th member of Star Alliance on 11 July 2014. Early years Air India is known as Tata Air Services later renamed Tata Airlines. After Indian Independence, 49% of the airline was acquired by the Government of India. Air India is suffered from heavy losses, finally, the Government of India approved the privatization of Air India in June 2017. On 27 January 2022, the airline was officially handed over to Tata Group.
What is Deal?
Air India will induct 210 Airbus A320/321 Neo planes, 190 Boeing 737 MAX single-aisle aircraft, 40 Airbus A350s, 20 Boeing 787s, and 10 Boeing 777-9s into its fleet. The estimated cost of Air India is a whopping $85 billion according to the list of aircraft. Air India required 840 total aircraft in the need to replace the old fleet of 113 aircraft whose poor interiors. Airbus and Boing start delivering orders in the second half of 2023 and it will take 7 to 8 years to complete. This purchase will support over one million American jobs across 44 states and France as well. This is the reason this is biggest ever aviation deal
Why did Air India require so many new planes?
The Tatas acquired Air India from the government and gained control in early 2022. Carrier has already merged itself with Vistara, after which it emerged as the country’s largest airline operating on international routes and the second largest in the domestic market after Indigo. The Tata group owned 218 planes and was flying to 57 domestic and 45 international destinations in 31 countries across five continents around the world. After this deal, Air India will overtake Indigo’s fleet of 300 aircraft to emerge as the largest airline in domestic routes too. The deal is also at the heart of Air India’s five-year plan to transform itself into a world-class airline. Air India could turn Indian cities into hubs for long-haul flights, much as Turkish Airlines has done for Istanbul or Qatar Airways for Doha.
How will the deal help Air India?
The Tata group is currently looking to build a market share of 30 % in the domestic aviation space through its three entities, including Air India, Vistara, and Air Asia India. India’s domestic market is currently dominated by Indigo, which has been expanding at breakneck speed. Indigo airline currently boasts a fleet of over 300 aircraft, the highest in the country. It operates the Airbus A320 CEO and NEO, the A321 NEO, and the ATR 72-600 aircraft. Indigo has a domestic market share of 56.2 %, ferrying over 6.5 million passengers a month and operates over 1,600 daily flights, and connects 76 domestic destinations and 26 international ones. India’s domestic aviation market is currently led by low-cost carriers that control as much as 80 percent of the market. Tata’s total fleet size stands at 219, including Air India’s 113 aircraft, Air Asia India’s 28 aircraft, Vistara’s 54, and Air India Express’ 24 jets. This deal is helping tata to replace its old aircraft and increase its ferrying capacity to compete in the domestic market against Indigo Airlines. The Tata Group is eyeing to create an Air India brand umbrella that will have a single low-cost platform and a single full-service platform by the end of 2023.
How will Air India become a world-class airline?
Within a short period of time, this deal is famous around the world. In particular, the leaders of the US, France, and the UK welcomed the commercial benefits of the deal for their industries. Back in India, Air India still has to slough off a poor reputation one-handed from its years of government ownership, although it hasn’t improved in the year since the Tatas bought the airline.
There are lots of incidences like last November, an inebriated man urinated on a 70-year-old fellow passenger in the business class cabin of an Air India flight. This incident shows the poor passenger handling capacity of the airline. Last so many years customers both international and domestic have complained about poorly maintained cabins, broken seats, and lack of hygiene. This incident creates poor trust issues in customers’ minds. Tata wants to fix these operational issues and expand airline Service destinations. The new fleet will provide a cleaner and rich experience to the customers like other world-class airlines provide.