Air India is on the verge of announcing an order for 500 aircraft, which would give them an order book similar in size to United Airlines.
They are expected to order 400 narrowbody planes, and 100 widebodies. According to one of the biggest players in airline leases, Steven Udvar-Hazy, the order will likely be:
a mix of (Airbus) A320neos, A321neos and (Boeing) 737 MAXs, and 100 wide-bodies which will include (Boeing) 787s, 777X, potentially some 777 freighters and (Airbus) A350s.
Air India currently operates Airbus narrowbodies and Boeing 777 and 787 widebodies. It is unclear how it can make any sense to add Boeing to the narrowbody fleet and Airbus to the widebody fleet, and indeed they aren’t replacing one with the other they’d be growing both… including A350s that American finally got off of its balance sheet and that United Airlines eventually will too as well, and 777Xs that do not exist yet in commercial production.
In general Airbus narrowbodies are more attractive to airlines than the 737 MAX, Boeing lacks a real competitor in the middle-of-the-market segment like the Airbus A321XLR (they have no replacement for the Boeing 757) and Boeing widebodies are preferred by many carriers. It would make sense to stay all-Airbus narrowbody and all Boeing widebody, as they are today.
Operating a little bit of everything is a much tougher case. It’s a more complicated operation. It means more parts for more planes in more places. It means more cumbersome pilot training and mechanic training.
After more than 4 years of trying to sell Air India, the government finally succeeded. It’s been acquired by Indian conglomerate Tata Group, and the airline is being led by the former CEO of Singapore Airlines low cost carrier Scoot.
Placing an order for 500 planes at one time, including 100 narrowbody jets, would be one of the largest aircraft orders in history. It’s said that negotiations with engine suppliers are the current holdup. And given Udvar-Hazy’s comments they likely are involving lessors in the negotiations. Boeing and Airbus will want to know that they can get paid for any firm portion of the order, and Air India’s balance sheet on its own won’t be able to finance something so substantial (although the entire Tata Group is worth hundreds of billions).
When the deal is ultimately reported a dollar value may be announced. Bear in mind that such amounts are almost always calculated based on list prices, but no one pays list prices. Large aircraft orders are generally for order-of-magnitude 50% off of list though some may go lower.
Air India with the airplane order samples, “I’ll take one of everything, thanks.”
The MAXes are the only ones available on a relatively short notice as the A320neo family of aircrafts are sold out well into the future. They simply don’t have any choice in a world of oligopoly.
India has no choice but to play politically which means taking narrowbody and widebody from both A and B which cannot be politically done by choosing A for narrowbodies and B for widebodies.
Plus A and B are undoubtedly deeply discounting where they are weaker than the other – the MAX for B and the A350 for A
Am I mis-recollecting that Air India was supposed to have some new widebody planes with a new Business Class on its US routes arriving around now?
Mak,
Air India has placed 3 or so former Delta 777-200LRs into service and has some more in the pipeline.
They have the Delta cabins with just the Delta logos removed – so the Delta One, Premium Select, Comfort+ and Economy seats just as Delta had on those aircraft.
@Tim Dunn Thanks. Any idea which routes these are on at the moment? I have a trip to DEL coming up soon and I’d give AI another shot if I knew it was on the DL 777-LRs.
Air India express has always flown 737s. It’s only the mainline AI that had A320 family aircraft. The A350 is out of left field though
Mak,
The former Delta 77Ls are being operated on BOM-SFO and BLR-SFO. Unfortunately, DEL is still being serviced by old AI 77Ls, however AI is due to induct 3 more DL airframes in the coming weeks.
Ordering 500 planes is nothing but stunt for Air India just to make some noise. Looking at the history of Air India, it has never had so many planes in one time. I can bet with you probably Air Indian never had 500 planes all together in its existence.
Remember India is not China. It will have all the corrupt politicians in line to make money from this deal wheather Indian government owns the Air India or not. Years of bureaucratic intervention will
slow down the process no matter what.
As I was saying, India is not China, is much more developed than India and China has better infrastructure than India. Understand that it will take many years to deliver all the 500 planes and India has simply no way to be able to have all those plane in use. It will take hundreds of airports to use those planes that India simply does not have.
Singapore airlines CEO will not be able to change the mentality of Air India culture in a year or two. But I think it is a new beginning and if politicians and bureaucrats stop interfering then Air India has a chance to survive and succeed.
They seem to want to add to the fleet size and fleet complexity. About the latter, maybe it’s part of having a platform to more easily poach pilots from competitors in an era where pilot shortages seem to be an issue (or excuse) in parts.
India had a plan to add a huge number of airports to the country.
Given India’s population seems to be on track to continue to grow and become more populous than China within months (if not already), and there is a demographic dividend that comes from population growth of healthy, physically work-capable young people, India should be a growing market just because of that. But India has a different structural dynamic than China, and that is one that has true unemployment and labor participation rates being lousy in India because the country simply doesn’t create enough jobs for its young population and thus is probably sitting on a socio-political time-bomb that the siren sound of extremist Hindu religious tribalism may not forever work to control by seducing the public with fascism and its xenophobia and hatred of religious minorities.
Yeah but can they actually PAY for them?
Air India is a private enterprise. They won’t store more aircraft than they can use, and aircraft makers won’t ship aircraft to a customer who is unable to pay. If Air India makes the incorrect choice, it will inevitably fail. Given everything mentioned above, I’m not sure what the issue is for some of the people who voice skepticism and doubt.