News / Air India inks deal for another 100 aircraft as it eyes booming domestic market

Photo: Air India

Tata Group-owned Air India is looking to grab a larger slice of the country’s rapidly expanding aviation market. 

Tata yesterday inked a deal with Airbus to acquire another 100 aircraft – in addition to an existing order for 250 with the European manufacturer and the 220  it agreed to buy from Boeing early last year, deals together worth some $80bn.  

“With India’s passenger growth outpacing the rest of the world, its significantly improving infrastructure and an aspirational young population increasingly going global, we see a clear case for Air India to expand its fleet beyond the firm orders of the 470 aircraft placed last year,” said group chairman Natarajan Chandrasekaran. 

“These additional 100 Airbus aircraft will contribute to our mission of building Air India into a world-class airline that connects India to every corner of the world.” 

Air India had indicated there were “options” to expand its acquisition window by 370 aircraft and the latest order — for 10 widebody A350s and 90 narrowbody A320s — seemingly ties-in with that investment programme.   

Additionally, Air India signed on to use Airbus’s Flight Hour Services-Component (FHS-C) for the maintenance needs of its A350s. 

“The new materials and maintenance contract will help Air India to optimise the reliability and performance of its A350 fleet, with comprehensive engineering services and integrated component services, including on-site stock at Delhi provided by Airbus,” the carrier said. 

The fleet expansion means a belly space boost for Air India, as the airline targets a three-fold increase in its cargo handling capacity by 2027-28.  

The carrier has devised multiple strategies to position itself to take advantage of India’s booming air cargo market, and recently onboarded SaaS solutions leader IBS Software to enhance its freight handling capabilities. 

Meanwhile, other home-grown airlines are betting high on the growing domestic market. IndiGo, which has also lined up a massive fleet expansion, logged a 17% increase in tonnage last fiscal year, and aims to end the current year on a high note.  

Boeing, in a recent report, predicted Indian air cargo volumes had the potential to quadruple over the next two decades, propelled by roaring ecommerce demand. And Indian air cargo industry stakeholders see a wave of new growth opportunities from multifaceted investments and bullish trade indicators.   

“Air India’s new flight orders promise enhanced competitiveness, broader demographic reach and increased freight capacity,” Anita Sharma, air freight (product head) at Mumbai-based forwarder Triton Logistics & Maritime, told The Loadstar.  

And Vineet Malhotra, co-founder and director at Kale Logistics Solutions, added: “Strategic investments in airport and cargo terminal infrastructure, coupled with the development of regional air cargo hubs, are strengthening India’s capabilities to meet growing demand.”