Air India starts discussing aircraft orders; to introduce a premium economy class in long-haul flights

AIR INDIA

Tata Group-owned Air India is in talks with Boeing and Airbus about ordering new aircraft and is meeting its immediate needs by leasing planes and repairing grounded aircraft, the airline’s chief executive said on Saturday.

The autos-to-steel conglomerate, which completed its purchase of Air India in January, faces an uphill struggle to upgrade an ageing fleet, turn around the company’s financials and improve service levels, industry analysts say.

“We are in deep discussion with Boeing, Airbus and engine manufacturers for a historical order of the latest generation aircraft that will power Air India’s medium- and long-term growth. At the risk of gross understatement, the investment will be substantial.”

Campbell Wilson, CEO & MD, Air India

Wilson said Air India planned to expand its fleet and global network, aiming to increase its market share to 30% on domestic and international routes over the next five years.

Currently, Air India has a domestic market share of about 10% and an international market share of around 12%, according to industry estimates.

Air India starts discussing aircraft orders; to introduce a premium economy class in long-haul flights

ALSO READ – Air India to revamp its fleet by leasing 30 aircraft in the upcoming months

Air India said in September it would lease 30 Boeing and Airbus planes, expanding its fleet by more than 25% as part of the drive to boost market share and improve service levels.

Industry sources said in July that Air India was moving closer to a decision on an order worth USD 50 billion at list prices to be split between Airbus and Boeing.

ALSO READ – Air India plans to expand its fleet 3 times; in discussions with aircraft manufacturers

The sources said at the time that both planemakers were making a “final push” with the order set to include up to 70 wide-body jets including Airbus A350s and Boeing B787s and B777s, and up to 300 narrowbodies.

Air India to introduce a premium economy class in some long-haul flights

Air India will be introducing premium economy class in some of its long-haul international flights next month, its chief Campbell Wilson said as the Tata group-owned airline works on ways to expand its market share as well as the global network.

Noting that Air India’s transformation journey will be in phases, Wilson said over the next six months it will be taxiing, fixing the basics and readying itself for growth.

In his speech at an event by the JRD Tata Memorial Trust here, Wilson said the airline will increase its market share to at least 30% in domestic and international routes. The airline is implementing a long-term revival plan and over the next five years, it aims to grow its wide-body and narrow-body fleet as well as expand the global network.

According to Wilson, the airline has restored nearly 20 aircraft that had been grounded for years due to a lack of parts and money. Leaving aside cabin interiors, this has required procuring over 30,000 parts that had been cannibalised over the years to keep other aircraft flying, he added.

“The short-term actions have been to replace carpets, curtains, seat cushions and covers. To fix defective seats and inflight entertainment systems as fast as supply chains will allow. And where parts are no longer available in the market, to work with the likes of Tata Technologies to design and manufacture parts ourselves. We’ve recently completely revamped the domestic inflight menu, and will be doing likewise, as well as launching premium economy on certain long haul international flights next month.”

Campbell Wilson, CEO & MD, Air India

ALSO READ – Modernization of Air India to start soon by Tata Technologies

In addition to restoring long-grounded aircraft, he said the airline has finalised leases for 30 additional aircraft being delivered over the next 12 months, starting next week, with more in the final stages of negotiation.

Noting that Air India’s transformation journey will be in phases, Wilson said over the next six months it will be taxiing, fixing the basics and readying itself for growth.

AIR INDIA
Air India has expanded both domestically and internationally, the latter including more flights to Vancouver, Sydney and Melbourne.

“For the subsequent year we’ll start the take-off run, building for excellence and attracting those who may not have considered Air India before, and by April 2024 or thereabouts, we will leverage the work done in the earlier phases to climb rapidly so that by 2027 we have scaled the heights of our aspiration,” he added.

Air India has expanded both domestically and internationally, the latter including more flights to Vancouver, Sydney and Melbourne.

“We now operate non-stop to London from seven Indian cities,” he said and added that from Mumbai, the airline will be adding new non-stop service to San Francisco, New York and Newark starting in a few weeks.

ALSO READ – Air India to start direct flights between Mumbai-San Francisco

Emphasising that the airline no longer has financial or any other constraints, he said “turning around Air India and restoring it to glory is a test match, not a T20. It will require patience, fortitude and partnership. Though there will be the occasional six and four, it’ll mostly be the steady accumulation of singles and doubles.”

The rapid development of new Indian airports and the government’s regional air connectivity scheme UDAN to support developmental domestic routes will only strengthen the network effect that will power further growth, he stated.

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