Make two out of four is the Air India Group's self-imposed formula for success. Accordingly, the flagship Air India is merging with Vistara. The latter is 51% owned by TATA, and the remaining 49% is held by Singapore Airlines. In addition, Air India Express and AIX Connect, which also belong to the TATA conglomerate, are joining forces. This move is close to completion, announced Air India Chief Executive Officer and Managing Director Campbell Wilson on 18OCT23.
One aircraft each week
Indian aviation is thus consolidating at high speed to become both a local and intercontinental player, following Tata Group taking control of ill service offering and loss-making Air India only
in January 2022. No sooner was the ink dry on the purchasing agreement than the second move followed earlier this year: Air India placed orders for 470 aircraft from frame makers Boeing and
Airbus at USD 70 billion (based on list prices). Speaking during a ceremony for the unveiling of Air India Express' new brand identity, CEO Campbell Wilson announced the next big drumbeat:
"Air India Group will take delivery of one new aircraft every six days on an average till the end of 2024," the executive said.
New brand identity
The executive added to this that market share is the consequence of capacity, and capacity is a consequence of factors like aircraft orders and deliveries. This he said on the occasion of the
unveiling of Air India Express' new brand identity. Air India Express Managing Director Aloke Singh added to this that the difficult part of the merger between Air India Express [AIX] and
Bengaluru-based budget carrier AIX Connect (formally AirAsia India) has already been done, with legal processes normally taking 6 to 9 months. “We are hoping to complete it [the merger] by
March next year," Mr. Singh stated.
Focusing on domestic and regional routes
Further to this the manager indicated that Air India Express will operate all across India, serve the Southeast Asian region, the Gulf area and other parts of the Middle East. "And the big
benefit that we have is that being a part of the Air India Group, we are able to integrate our network and provide cross feeds and gain from feeds... our network will feed the Air India flights,"
he noted. Based on a five-year plan “we are looking at doubling our market share on domestic India, and also doubling it in the short haul neighboring region," Singh explained.
"If you look at it as a combined entity, it is 7-8 per cent domestic market share. It is about 11-12 per cent on international short haul. Once we scale up, and once we get our new feed into
commercial operation, we are really looking at growing big and [...] it is not about growth just for a couple of years. It is about growth long term," Singh emphasized.
New brand presented publicly
On Wednesday (18OCT23) Air India Express unveiled its new brand identity and aircraft livery that mainly features the colors of orange and turquoise. "As we increase the fleet of Air India
Express, the market share should go up but of course, that takes time and it will take time as deliveries come up," Mr Singh added.
Cargo has still a lot of catching-up to do
In a recent survey titled “How India’s air cargo industry is poised to take off” the authors Lewis Burroughs, Sharad Gambhir, and Dhruva Kemp predict a massive demand for air cargo in
the coming years in India mainly driven by e-commerce. Hence, it has become paramount that airlines seize this opportunity while it lasts and offer “committed” capacity to large e-commerce giants
like Flipkart and Amazon. This will not only help in the short run, by allowing airlines to increase their carrier yield, but might prevent them in the long term from being drawn into
less-advantageous direct competition, in the form of trying to outcompete the dedicated shipping arms of vertically integrated e-commerce giants (i.e., Amazon Air).
Potential for becoming a massive cargo hub
The authors recommend airports such as Delhi, Mumbai, Hyderabad, Bengaluru and some others to incentivize Indian airlines to operate freighter flights in the region, and to route those flights
directly through India. “India with its unique geographical advantages has the potential to be a massive cargo hub for the entire region, but the lack of a larger dedicated freighter airline
sector has been a significant handicap. The airports and the state government can play a major role in developing freighter hub carriers and transforming India into the logistical nerve center of
a vertically integrated future,” their joint analysis concludes.
The aforementioned order of 470 Airbus and Boeing jetliners did not include a single freighter aircraft.
Heiner Siegmund
We welcome and publish comments from all authenticated users.
Write a comment