Go Big or Go Home

Air India’s Big Makeover

BY BYRON BOHLMAN

The sheer magnitude of Air India’s order for nearly 500 new aircraft, an industry record, has all eyes focused on the former state-owned carrier and its ability to claw itself back from the edge of extinction. The re-fleeting of the 90-year old airline is the latest and most ambitious move by recently appointed New Zealand born Chief Executive Campbell Wilson to remake Air India as a true domestic and international competitor.

Where others have failed, Wilson may just be able to pull off the radical transformation of the once-respected flag carrier. The CEO has wasted no time since assuming his new position. Last year, he announced plans to integrate Air India with Vistara, and Air Asia India with Air India Express. That consolidation was one of the first initiatives of Vihaan.AI, the company’s aggressive five-year plan to rebuild lost market share, grow its international network, compete more effectively on domestic routes, win back customers, and turn a profit.

The shopping spree for new airplanes is the latest of 22 planned initiatives to be announced in the rebirth of the newly privatised company. The bold strategy faces both headwinds and tailwinds that may make the journey to success a rough ride.

New Airplanes Bring Greater Operational Flexibility

The order for a mix of some 220 new B737 MAXs, B787s and B777s plus about 270 A350s and A320series jets, which includes options, reflects the versatility of those airplanes to fly domestic, regional, and long-haul missions. The selection of those air- craft types is consistent with Air India’s vision to be both a full-service airline on regional and international routes, and a LCC domestically.

The carrier previously announced it was seizing an opportunity to acquire a surplus of B737 MAXs from the manufacturer and use them for LCC operations with Air India Express. Those aircraft are ideal for domestic routes yet equally attractive on regional routes, especially between primary and secondary cities in India and points in the Gulf.

Expect to see the airline introduce more ultra long-haul nonstops with the new B787s and A350s although it could also deploy widebodies in metro markets to satisfy peak demand.

Better Network Connectivity To Rebuild Market Share

Post-pandemic demand for domestic air travel is strong. Enplanements were up 48.8 per cent in 2022 over 2021 to 123 million passengers, according to IATA. Yet Air India carried just 8.7 per cent of that volume (about 25 per cent if you add the shares of Vistara, Air India Express and Air Asia India) compared to IndiGo, which had a 56 per cent share of the domestic market.

At last, Air India has addressed the need to have an effective domestic network with sufficient frequencies, seat capacity, and cities to feed its international expansion. This has always been the airline’s Achilles Heel. The new narrowbody aircraft are expected to expand services throughout the country, facilitating the transfer of passengers wholly on the Air India brand and challenging IndiGo’s domestic dominance. Accordingly, Wil-