In the late hours of Wednesday, October 9th, European aircraft manufacturer Airbus revealed that an undisclosed customer had made a significant order exceeding $6 billion worth of airplanes. Recent reports, including those from Reuters and Aviation Week, have suggested that this substantial order was made by Air India, the national airline of India.
The discreet nature surrounding this acquisition is not unusual in the industry; carriers often strive to keep their fleet strategies hidden from their rivals for various reasons. Additionally, Air India was in a state of mourning yesterday due to the recent passing of Ratan Tata, the former chairman of the Tata Group, which owns the national airline, leaving behind a legacy as a trailblazer in Indian commercial aviation.
A period of extensive transformation and organizational change is set to ensue.
This landmark acquisition of 75 Airbus A320-family aircraft and 10 ultra-long-haul Airbus A350 jets highlights the airline’s ambitions for future expansion across short, medium, and long-haul routes. Numerous industry insiders have since pointed out that Air India is indeed the airline behind this enigmatic order, which comes less than a year after the airline ordered nearly 500 new aircraft from both Airbus and American manufacturer Boeing, all aimed at a long-awaited overhaul of its fleet infrastructure.
The airline, which had retained several order options following its purchases last year from Airbus and Boeing, has reportedly utilized all of its options when placing the mysterious order announced by Airbus in its monthly update yesterday. Following the death of Tata, who was 86 years old and had long been the patriarch of the Tata family, Air India’s parent company will seek new leadership for guidance as it navigates its future.
Three significant orders that will transform Air India into something nearly unrecognizable.
In 2023, Air India declared its acquisition of 220 aircraft from American manufacturer Boeing and 250 aircraft from its European counterpart Airbus. These aircraft will significantly alter the composition of the Air India fleet and encompass the following models:
Boeing 787 Dreamliner, Boeing 777X, Boeing 737 MAX, Airbus A320neo, Airbus A321neo, Airbus A350-900, Airbus A350-1000
Both orders also featured options for additional aircraft, with the Boeing order including potential purchases for approximately 70 more planes, according to the manufacturer. The 85 existing options for Airbus acquisitions were exercised by the airline for the order announced yesterday and comprise the following aircraft, Airbus A320 and A350.
With an aging fleet, Air India’s comprehensive transformation will assist the airline in reducing its operating costs by introducing new, more fuel-efficient narrowbody and widebody jets. Currently, the airline faces its most significant competitive challenge from budget carrier IndiGo, which has captured a substantial portion of the domestic market with its low fares and is eyeing opportunities for international expansion.
Air India’s substantial acquisition of fuel-efficient narrowbody jets indicates that the airline is fully committed to competing with IndiGo in the domestic market and aims to lower operating expenses to bring down ticket prices. Additionally, with IndiGo having recently placed an order for the Airbus A350 in anticipation of long-haul expansion, Air India’s investment in more fuel-efficient widebody aircraft seems to be a calculated reaction.
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