Large orders for aircraft at the Paris Air Show will see India's two leading airlines, Air India and Indigo, enter into serious competition against their Gulf and Southeast Asian rivals in terms of passenger and air cargo transportation. Together, they have placed firm Airbus orders totaling 750 aircraft. In addition to this, Air India has confirmed a contract for 290 new Boeing aircraft, announced earlier. The Indigo order of 500 medium range aircraft is the largest single order in the history of civil aviation.
The cards in international aviation are being reshuffled. Whereas India has so far played a minor role in this key transport industry, partly due to the notoriously poor service of formerly state-owned Air India, coupled with constant technical hiccups, the country’s aviation has now taken a U-turn, heading towards playing a leading role in international civil aviation. This was shown by the massive aircraft orders signed by Indian carriers at the latest Paris Air Show, and triggered by three main factors: the fabulous rise of the low-cost carrier, Indigo, in the recent past, the takeover of Air India by the private Tata Group in JAN22 for €2.13 billion, and the traditionally underserved Indian aviation market, which, in the absence of serious local competition, has become a goldmine for Gulf Airlines.
New deal in aviation
Air India, in particular, has been brimming with self-confidence since the holding company Tata Sons took the reins in JAN22. This is expressed in a long-term vision according to which the
airline is to become one of the world's leading network providers coupled with excellent service for its paying customers. This also applies to forwarders and shippers, who are invited to utilize
the capacity of the cargo compartments of the passenger fleet to transport their imports or exports to/from key markets.
New rules prevail at Air India
But the times, they are a-changing, as Bob Dylan sang already in 1965. Particularly Air India has been brimming with self-confidence lately. The carrier’s key principles read: Performance should
count, and an end should be put to the feudal patronage system according to which senior jobs are awarded to politically compliant individuals or family members of Indian elites. Another motto:
Anyone who grossly violates company principles, can pack their bag. This is standard practice in other units of the Tata conglomerate, which includes the Jaguar and Land Rover car brands. Tata
also holds 51% in Indian airline, Vistara, and 84% in AirAsia India. There are indications that the Group wants to merge the different airlines. However, the speculations lack official
confirmation by the Group's top management.
Surpassing BA’s fleet
At the Paris-held Aero Salon, Air India has now confirmed announcements that it will be taking delivery of a total of 290 Boeing jetliners and 250 Airbus aircraft, adding up to 540 newbuilds in
total. Once delivered, its fleet will surpass that of IAG member, British Airways, which currently operates 327 planes, of which 117 are long haul.
However, neither Indigo nor Air India say how they plan to finance their large orders. Although significant financial discounts are common for such packages, but even with generous discounts
granted by the frame makers, a high double digit billion-dollar amount remains, which is due proportionately with the takeover of each individual aircraft.
Redistribution of passenger and cargo flows
While the bulk of Air India's single aisle models will serve domestic and regional routes, 30 Boeing (20 B787s, 10 B777s) and 40 Airbus widebody aircraft (34 A350-1000s, 6 A350-900s) will operate
long distance. They will complement the existing fleet of 40 widebody Boeing 787 (23 units) and B777 (17 aircraft). The carrier is thus in a position to serve a large international network and
offer abundant capacity on trunk routes such as Delhi-Heathrow, for instance. Consequently, Air India will snatch away passengers and air freight volumes not only from its Gulf competitors but
also from Turkish Airlines on intercont east west routes or to Sub Sahara Africa. After all, direct flights are more comfortable, compared to transits at Abu Dhabi or Dubai, and for cargo clients
faster, securing product quality of perishable exports and other temperature-sensitive cargo - a main Indian commodity, if well managed from field to shelf.
Airbus clears the table at the Paris Aero Salon
In total, Airbus was able to conclude firm orders for the delivery of more than 830 aircraft during the Air Show at Paris Le Bourget. The European manufacturer thus left its arch-rival, Boeing,
far behind. The latter sold mainly single aisle variants, (see Air India above), with Ryanair placing a massive order totaling 175 Next Gen 737-800 aircraft. It is the largest Boeing order ever
signed by a European carrier. At the Paris Air Show, CEO, Michael O'Leary indicated his company's interest in Boeing's 737 MAX, but did not specify plans.
Heiner Siegmund
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