Air India: How the record plane deal is a game-changer

The record purchase of 470 aircraft by Air India from Airbus and Boeing comes as the airline strives to establish itself as “a world-class offering,” in the words of N Chandrasekaran, chairman of the Tata Group, which owns the airline.

These orders, which surpass the 460-plane contract made by American Airlines in 2011, would modernize Air India’s fleet and enable it to “dramatically” extend its network, according to Mr. Chandrasekaran.

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The ailing national carrier, which Tatas purchased almost two years ago, has decommissioned the majority of its older planes and started a five-year plan to update its aging fleet. At the conclusion of this year, the first new aircraft will enter service.

According to experts, the scale of this new order shows Air India’s determination to retake the lead in India’s competitive aviation sector and gain a competitive advantage to serve the rest of the world.

“These orders directly synergise Air India’s fleet with Lufthansa and Singapore Airlines – all part of Star Alliance, the world’s largest global airline alliance,” said Mark Martin, an aviation analyst. “To me it looks like a big game plan to counter the dominance of Gulf carriers, for whom Star Alliance has been an arch nemesis”.

For international connections to Europe, the US, and other parts of the world, Indian travelers today rely mainly on Emirates, Qatar Airways, Etihad, and other Middle Eastern airlines. As the new fleet for Air India is placed into service, Mr. Martin thinks that could change.

Air India will be able to immediately enter markets like the US and Australia through the purchase of wide-bodied aircraft like the A350s thanks to nonstop flights between these locations and India. These are profitable routes to serve the significant Indian diaspora that is present abroad.

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