Air India Hopes New Widebodies Will Help It Reach US Growth Potential

Summary

• With more new widebody aircraft, Air India aims to bolster its route network & tap into underserved markets.
• The airline has increased its services to the UK by 75% since its privatization.
• Aircraft delivery delays pose challenges. Enhanced competition on the horizon from IndiGo domestically and the Middle East airlines internationally.

Air India’s management believes that the airline will be able to continue growing its network and attain full potential in long-haul markets such as the United States as it takes delivery of more new widebody aircraft. With the upcoming merger with Vistara, the airline will see more widebody aircraft inducted into its fleet, along with the delivery of new Boeing and Airbus widebody aircraft from Air India’s record-breaking order last year.

Strengthening the route network

Since Air India’s privatization, the airline has experienced significant growth in its route network and fleet strength. With a record-breaking order of 470 aircraft last year, which will see the airline’s narrowbody and widebody fleet grow with new Boeing and Airbus aircraft, Air India can finally expand into various underserved markets.

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Air India has placed a historical order worth $68 billion across both manufacturers.

While the airline has previously operated Boeing 777s and Boeing 787s, the carrier has now begun operating the Airbus A350-900s, which will soon be deployed on services to London Heathrow and even the US.

Photo: Air India

Air India’s CEO – Campbell Wilson, told Simple Flying the following during a media roundtable at the Farnborough Airshow:

“Our network has expanded a lot in most of the geographies we serve. In fact, I think in all of the geographies. In the UK, we’ve increased the number of flights by 75% since privatization. – the amount of capacity by double. The A350 will be doing double daily, Delhi-London Heathrow, in September. In the US, we’ve added a lot of capacity into San Francisco. We inaugurated Mumbai-San Francisco and Bangalore-San Francisco. We’ve added capacity into New York. We’re increasing frequency in Toronto, and we’re looking at potentially another couple of destinations in the reasonably near future in North America. We see a big opportunity.”

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Constrained by aircraft

While ordering aircraft is an essential step toward growing an airline and its route network, the ability to expand is heavily dependent on receiving the aircraft at the right time. However, with the industry still facing supply-chain issues and aircraft delivery disruptions, Air India, among other airlines, is constrained in its growth.

Photo: Tom Boon | Simple Flying

Wilson further stated that by receiving more widebody aircraft, the airline would be able to harness the country’s massive population’s desire to travel, strengthen its position, and gain a competitive advantage.

“At the point of privatization, India as a country only had 43 widebody aircraft. You compare those 43 for 1.4 billion people with Singapore, which has 150 widebodies for 5 million people, and Dubai, which has 250 for 7 million people. So, the opportunity for growth out of India, even if you just focus on point-to-point, is enormous. So, our limiting factor is access to aircraft and the pace at which they can be delivered.”

While the carrier will be waiting a considerable time before receiving any Boeing 777-9s, it can still continue to expand with the delivery of new 787s and A350s. In fact, reports from recent weeks suggest that Air India is considering adding new destinations in the US, such as Dallas and Los Angeles services from Delhi and possibly a third Australian destination – Brisbane.

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Competition on the horizon

While Air India is growing steadily, the airline is also facing increased competition both domestically and internationally. In terms of domestic competition, IndiGo is the main player, as it is the largest airline in India. While IndiGo has a robust domestic network, the airline, upon receiving its A350 widebody aircraft, will also be able to compete with Air India on long-haul routes.

Photo: Airbus

In terms of international competition, Air India will be competing on several routes with Middle Eastern carriers such as Emirates and Qatar Airways. Both airlines offer industry-leading inflight services and one-stop worldwide connectivity from their mega-hubs in Dubai and Doha, respectively.

While Air India’s ability to offer more direct services with its new widebody aircraft definitely works in the airline’s favor, it is worth noting that both Emirates and Qatar Airways have successfully built a strong loyalty base within the Indian passenger market, which will see various segments of passengers still stick with the Middle Eastern carriers despite Air India offering direct services.

Furthermore, like Air India, the Middle Eastern super-connectors have hundreds of aircraft on order, which will allow the carriers to continue growing and improving services, thus ensuring healthy competition.

• 
  

  Air India

  IATA/ICAO Code:

  AI/AIC

  Airline Type:

  Full Service Carrier

  Hub(s):

  Delhi Indira Gandhi International Airport

  Year Founded:

  1946

  Alliance:

  Star Alliance

  CEO:

  Campbell Wilson

  Country:

  India

  Region:

  Asia

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