Potential Multi-Billion Dollar Aircraft Deal in the Works
Air India is in discussions to place a significant widebody aircraft order with both Boeing and Airbus, industry sources have revealed. The negotiations involve acquiring between 30 to 40 aircraft, potentially split between the Airbus A350 and Boeing 777X models.
- The potential deal could exceed 50 jets, as per one source.
- Discussions are ongoing, with clarity expected around the Paris Air Show in June 2025.
- If finalized, this will add to Air India’s record-breaking 470-plane order from 2023.
The airline, which was once a symbol of world-class service, is undergoing a major transformation under Tata Group ownership, after suffering years of operational decline under state control.
Strategic Expansion to Regain Market Share
This new widebody aircraft deal is part of Air India’s ambitious strategy to modernize its fleet and recapture lost market share.
- The airline already has orders for 50 Airbus A350s, 10 Boeing 777Xs, and 20 Boeing 787 Dreamliners from previous agreements.
- The majority of its 2023 aircraft order focused on single-aisle jets, with the new order set to strengthen its long-haul international network.
- Indian international air travel demand is surging, expected to grow 15-20% in the current fiscal year, far outpacing domestic travel growth of 7-10%, according to ICRA, a Moody’s local ratings agency.
- Air India is looking to compete aggressively with global airlines like Emirates, Lufthansa, and Turkish Airlines, which have historically dominated India’s international traffic.
Race for Limited Widebody Aircraft Production Slots
As international passenger demand from India surges, airlines are rushing to secure production slots for widebody aircraft, which are in high demand globally.
- IndiGo, India’s largest airline, has aggressively expanded its narrowbody fleet, leading to supply shortages in the aircraft market.
- Production slots for new widebody aircraft are becoming increasingly limited, with airlines globally placing massive orders to meet growing demand.
Air India’s expedited fleet expansion is aimed at positioning itself as a dominant player in long-haul international markets, a segment that global rivals have traditionally dominated.
Tata Group’s Transformation Plan Faces Aircraft Delivery Delays
While Tata Group’s turnaround of Air India is being closely watched by investors, manufacturers, and lessors, the airline is facing delays in aircraft deliveries due to global supply chain issues.
- CEO Campbell Wilson recently warned that aircraft shortages will persist for at least four more years.
- Supply chain disruptions affecting engines, business class seats, and fuselage components have slowed the airline’s modernization efforts.
- Due to these delays, Air India has continued using some older aircraft, impacting its efforts to improve passenger experience.
Despite these challenges, the airline remains committed to its five-year transformation plan, which aims to restore Air India’s global reputation and enhance operational efficiency.
International Market Share Battle Intensifies
Indian carriers currently control 43-44% of India’s outbound international passenger traffic, but foreign airlines still dominate long-haul travel.
- Emirates, Lufthansa, and Turkish Airlines have long attracted Indian travelers with newer aircraft and superior premium services.
- Air India’s new widebody fleet will be crucial in reclaiming international market share, especially on high-demand routes to Europe and North America.
- The airline, along with its low-cost subsidiary Air India Express, is set to receive around 20 aircraft in 2025, including both narrowbody and widebody models.
With this latest order, Air India is signaling its long-term commitment to becoming a global aviation powerhouse under Tata Group’s leadership.
