
Air India, now under new ownership, has grand plans for growth. And now it has a line on aircraft to fulfill those goals. The carrier (finally) announced Letters of Intent for 470 planes, plus 70 options, from Airbus and Boeing in a blockbuster move.
Included in the plans are 400 single-aisle aircraft:
- 190 737 MAX 8/10
- 140 A320neo
- 70 A321neo
For long-haul flying the carrier plans to take 70 new twin-aisle planes:
- 34 A350-1000
- 20 787-9
- 10 777x
- 6 A350-900
Depending on which of the two press releases you read you’ll see similar themes, though slight modifications in the quotes from Campbell Wilson, CEO and MD, Air India:
These new airplanes will enable us to dramatically expand our network, both domestically and internationally, and will come with a completely new, world-class onboard product enabling passengers to travel in the highest levels of comfort and safety.
A core element of this transformation is the significant expansion of our network, both domestically and internationally, coupled with the elevation of our on-ground and onboard product to world-class standards.
It would not be unreasonable to approach the announcements with a bit of skepticism. Air India’s recent history is not a particularly successful one.

Yes, the company is no longer owned by the government and that opens up some potential for the necessary transformation. But the fleet choices, and the overall market evolution in India, suggest success is anything but certain.
How to meet short-haul demand?
A booming population, and particularly the growing middle class in India mean ever growing demand for air travel. Over the past decade IndiGo has taken advantage of that demand, blossoming into the largest airline in the country. IndiGo’s international growth has even proven substantial, though its focus on single-aisle operations limits both the range and volume of such traffic.
When all the Tata-owned companies are considered, however, they roughly match the total capacity offered by IndiGo. And more than half the total capacity of the group covers international markets; only 25% of IndoGo’s capacity flies internationally per Cirium schedule data.
Plowing 400 brand new single-aisle planes into the domestic market comes with massive risk, despite the expected growth. Even if Indian consumers were keen to the more full-service experience, the pervasive LCC model exerts heavy influence in the market. And price-sensitivity remains a significant factor for those passengers. Yes, Vistara (also owned by Tata Group) has shown some success in building a market for the more full-service offerings. But the profitability of that approach is far from certain.
Indeed, developing an offering that can deliver a full-service experience to feed the premium long-haul markets and also can compete at the LCC level across the country is a massive challenge. And there’s also no guarantee that even for long-haul passengers will demand (or pay for) the more premium service.
Long-haul fleet splits
On the long-haul front, the fleet selection is even more interesting. Splitting across Boeing and Airbus comes with pros and cons. The size of the fleets is where things are particularly interesting.
Why only six A350-900s, for example? In a fleet of 40 A350s, such a small number seems a limiting choice rather than one that increases flexibility for the carrier. Perhaps those will be focused on the ultra long-haul markets – namely the USA – but even then with only six frames the number of markets that can be served regularly is limited.
Update: At least part of this decision is driven by the availability of -900 frames initially built for Aeroflot and now available at short notice. Does getting the planes quickly justifies the subfleet?
Similar questions arise around the plans for ten 777X joining the fleet, plus the uncertainty of when Boeing will be ready to deliver those.
Finally, much of the long-haul market for India is served through connections; Emirates and Qatar Airways in particular do strong business connecting to secondary and tertiary Indian cities from their hubs in the Middle East. Singapore Airlines similarly carries a sizable share headed towards Southeast Asia and Australia. Recapturing that market share within Air India will require not just more planes, but a truly revamped route structure.
Can Air India truly shift?
Perhaps it is telling that the Airbus release notes the deal is with “Tata-owned Air India” rather than just “Air India” as a way to differentiate the old and new. Perhaps the fact that the elected leaders of France and the United States issued statements on the deal is also significant vis a vis the airline’s plans. But it will take more than announcements to truly deliver on the needed change for Air India to deliver a competitive product and capture more market share.
Rebuilding the product and the route map are neither cheap nor easy tasks to undertake. Limits on foreign operations into India will help, but that protective cover will not be enough on its own. Air India will need to develop a plan to compete against LCCs both at home and abroad, as well as develop a full service offering that is compelling and price-competitive.
New planes are a strong start for such efforts. But most anyone can buy planes. Developing the airline requires much more than that.
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The Air India passenger experience needs to be addressed. New equipment for Air India is important, but until they re-train all of their customer-facing staff, I’ll stick with Singapore and Vistara Airlines. I sense that I am not alone in this.
I think the Tata Group hopes to get there. And since it is the majority shareholder in Vistara (SQ is the smaller partner) there’s a chance it makes the transition.