Air India aspires to expand its fleet to 400 aircraft by 2027, with a particular emphasis on domestic and short-haul traffic in 2025

This retrofitting initiative will significantly boost the airline's long-haul capabilities while simultaneously addressing the increasing demand for shorter routes.

Under the guidance of the Tata Group, Air India is gearing up for substantial growth in domestic and short-haul international traffic in 2025. This initiative is part of the airline’s ongoing five-year transformation plan, which targets a fleet expansion to 400 planes by 2027. At present, the Air India Group, comprising Air India Express, operates approximately 300 aircraft.

Fleet Expansion and Retrofit Plans

Air India’s CEO and MD, Campbell Wilson, confirmed that the airline is in the process of augmenting its fleet with more narrow-body planes, while the retrofit of older wide-body aircraft, including the Boeing 787s and 777s, is scheduled to commence in early 2025. “We had anticipated starting the retrofit of 787s and 777s by now. Unfortunately, some global supply chains are still in recovery, and seat availability is particularly challenging… Once the retrofit begins in 2025, we plan to complete 3-4 aircraft each month until all 40 legacy wide-body planes are refurbished,” Wilson elaborated.

This retrofitting initiative will significantly enhance the airline’s long-haul operational capabilities while also addressing the increasing demand for shorter routes. However, with the incorporation of additional narrow-body aircraft, growth in 2025 is expected to be largely driven by domestic and short-haul international flights.

Strong Domestic Market Share

Wilson also emphasized Air India’s strong presence in the domestic market, where the airline commands an overall market share of 29% and an impressive 55% on metro-to-metro routes. “On the top 120 domestic routes, our market share stands at approximately 40%,” he noted. The airline’s commitment to strengthening its domestic operations aligns with its overarching strategy to expand its footprint and solidify its position within the Indian aviation sector.

Delays in White Tail Aircraft Delivery

Wilson acknowledged the delays in the delivery of white tail Boeing 737 MAX aircraft, which were initially slated to join the fleet by December 2024. “We were expecting 50 white tail aircraft to arrive by December this year… However, they will now extend to June next year, which has some impact…,” Wilson stated, attributing the delays to challenges faced by Boeing, including a recent strike. To date, at least 35 out of the 50 white tail aircraft have been delivered, with the rest now anticipated to arrive by June 2025.

Consolidation of Tata Group’s Aviation Business

As part of Tata Group’s comprehensive strategy, Air India has merged with Vistara and integrated AIX Connect with Air India Express, thereby reinforcing its position within India’s aviation landscape. This restructuring is expected to improve operational efficiency and facilitate a more cohesive strategy across Tata’s airline operations.

With its expanding fleet and renewed focus on domestic and regional routes, Air India aims to enhance its service offerings and provide an improved travel experience for passengers throughout India and beyond.

Duopoly will draw in more private investment in aviation.

The Indian aviation market, currently dominated by only two competitors, is likely to entice new entrants supported by private capital, all eager to capture a share of the world's third-largest domestic market, according to a senior executive from Air India.

In light of the recent failures of Jet Airways and Go First, as well as the merger of Vistara and AirAsia India into the Air India group, the Indian aviation sector is experiencing significant consolidation.

“Other global aviation markets have experienced bankruptcies and the downfall of unprofitable airlines, which initiated the consolidation phase. This process has introduced stability, professionalism, and profitability,” Campbell Wilson, managing director and CEO of Air India, stated in response to a query from FE.

With over 90% of Indian airspace now dominated by IndiGo (63%) and Air India (29%), the market has effectively transitioned into a duopoly. Akasa Air and SpiceJet share the remaining market share. On routes connecting major cities, Air India claims a market share of 55%, while holding a 40% share on the top 120 routes, which together make up 60% of domestic traffic.

“There is currently a significant influx of private investment, professionalism, and stability into the system. In time, profitability will also emerge. Consequently, the world’s third-largest aviation market will undoubtedly support more than two airlines,” Wilson further commented.

Since its acquisition by the Tata group, the Air India group (including Vistara) has held a monopoly in the full-service international sector. The airline competes against prominent carriers such as British Airways, Lufthansa, Emirates, Qatar Airways, and partner Singapore Airlines in the long-haul and ultra-long-haul segments.

Expecting to expand its current fleet from 300 planes to 400 by 2027, the Air India group has acknowledged delays from Boeing, the US-based aircraft manufacturer, due to ongoing industrial challenges. Previously, Air India had mentioned a target of adding one new aircraft every six days.

In February 2023, the former flag carrier placed an order for 470 aircraft with both Boeing and Airbus, comprising a blend of narrow-body and wide-body planes. Although later reports in the same year indicated that Air India had ordered an additional 85 planes, Wilson termed it speculative when questioned about it.

Approximately one-third of its narrow-body fleet has undergone upgrades as part of a $400 million refurbishment program, with plans to upgrade the remaining fleet by mid-2025. The retrofit of older wide-body aircraft is set to begin next year.

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