Air India to add over 90 planes in two years in first order since 2006

This includes 56 planes that are part of mega aircraft order signed with Airbus and Boeing. These will be in addition to previously announced leases of 36 planes

The Tata-group owned Air India will induct over 90 aircraft within the next two years, as it looks to widen its footprint and grab a larger market share.

This includes 56 planes that form a part of the mega aircraft order that the airline has now finalised with Airbus and Boeing. These will be in addition to previously announced leases of 36 planes that include Airbus A320Neo, A321Neo and Boeing 777 aircraft.

Currently, Air India has 115 aircraft. Its last aircraft order was announced in 2006. At the group level the Tata group airlines (including Air India Express, AIX Connect and Vistara) fly around 220 planes.

Air India has ordered around 470 planes, which include a mix of narrow body and wide body Airbus and Boeing planes that will serve domestic, medium-haul and long-haul routes. These planes would be delivered to the airline in the next 7-10 years. A formal announcement would be made this week.

A source said Air India has selected 190 Boeing 737 Max, twenty Boeing 787s and ten 777X planes. The Airbus order would comprise 210 A320Neo and 40 A350 planes.

Air India will also have options and purchase rights for over 300 planes. Options and purchase rights are not the same as confirmed orders and need to be exercised by an airline in order to avail the aircraft.

Air India and Boeing did not respond to an email sent on Saturday. Airbus said it does not comment on confidential discussions with customers.

Deliveries will begin from this year. A person aware of the order said that the airline will start receiving the 737 Max aircraft immediately. Deliveries of six Airbus A350 planes are also expected to start from September and should be completed within a year.

In the next two years Air India will induct around 50 737 Max planes that form the part of the order.

Deliveries of balance 34 Airbus A350 aircraft and Boeing 787s are expected from 2025 and Airbus A320Neo planes will start joining the airline from 2026 onwards, it is learnt.

While initially the airline plans to densify its existing network, it also plans to add many more destinations as a part of its aim to achieve 30 per cent market share in domestic and international markets in next five years. Some of the changes are already visible with Air India adding services from Mumbai to New York and San Francisco – two routes previously served only from Delhi.

The process of developing a fleet and network plan for Air India has been going on even before Tatas re-boarded Air India last January. Performance evaluation of each aircraft was carried out based on its long term network plans before making a choice. This included examination of aircraft fuel consumption, maintenance, payload etc.

Actual negotiations with OEMs including engine makers CFM, GE and Rolls-Royce have been going for over a year. Both the aircraft and engine orders have been finalised simultaneously. Signing the aircraft and engine contracts is said to be crucial as the airline has got a pricing advantage. Also the airline management has better visibility over the entire life cycle cost of the aircraft, a source said.

“Within a year of Air India takeover the Tata group has finalised the mega order. The group has taken a strategic and long term view of aviation business and this is backed by capital commitments. Old planes are being retired and contracts have been signed for refurbishment of the existing fleet. New routes are being launched. The speed and scale shows the group’s ambitions,” said a Tata group watcher.

How Air India plan to ramp up its fleet

• Air India has a fleet of 115 aircraft at present. This includes a mix of Airbus and Boeing planes
• It will receive 56 planes as a part of its new order in two years. These would include 50 Boeing 737 Max and six Airbus A350 planes
• The airline has firmed up orders for 470 planes. It has the option to take 300 more aircraft
• Aircraft deliveries will take place in next 7-10 years