How Air India is Planning Their Expansion With Huge Investment
December 14, 2022: Air India seems to have made its ambitions clear with the Vistara merger. It wants one well-managed entity that can take on IndiGo in the domestic market and another Gulf-operated airline like Emirates on international routes.
Now, reports say the Tatas are placing a massive order of 500 jetliners that could be worth $100 billion. Reports suggest Air India is placing orders for 400 narrow-body jets and 100 wide-body jets potentially–Airbus A35s and Boeing 787s and 777s.
While the Tatas have not commented on the potential deal, it could be the biggest single order ever. While Air India will probably negotiate some steep discounts, the deal could still be valued at over $100 billion.
That’s much larger than the American Airlines order of 460 Airbus and Boeing jets that was made more than a decade ago. So yes, if it comes through, it will be the largest single order ever!
And that’s why it is a big deal! Spending $100 bn is definitely ambitious, and with that sort of budget, Tatas may not be looking at settling for anything less than being the number one domestic carrier and the dominant player on international routes to and from India.
This means taking on IndiGo back home and Emirates on international routes. Some reports suggest that Air India is looking to capture a 30% market share in the domestic market.
Well, India is the fastest-growing airline market in the world, and 500 new jets would expand Air India’s fleet and allow it to make the whole industry more competitive.
More competitive prices mean a possibility that more first time fliers may experience air travel. That could also give the economy a boost and help achieve the Narendra Modi government’s $5 trillion economy ambitions.
But with such ambitious plans, experts have warned that the carrier may face challenges including dealing with relatively fragile aviation infrastructure, and shortage of trained onboard staff and pilots.
Such ambitious plans could take several years to materialise, by which time other dominant players could improve their services and increase the size of their fleet to compete with what could be a resurgent Maharaja.
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