DGCA Gives Air India and IndiGo an In-Principle Nod to Import Aircraft: What’s Behind This Decision?

In a significant development for the Indian aviation industry, the Directorate General of Civil Aviation (DGCA) has granted in-principle approval to Air India and IndiGo, two of the country’s major airlines, to import aircraft. General VK Singh (Retd), the Minister of State in the Ministry of Civil Aviation, made the announcement during a written reply to a question in the Rajya Sabha on Monday.

According to a release by the Civil Aviation Ministry, Air India and IndiGo’s parent company, Interglobe Aviation, have received in-principle approval for importing a substantial number of aircraft.
The Directorate General of Civil Aviation (DGCA) has granted approval for Air India to import 470 aircraft, while IndiGo has received the nod for importing 500 aircraft.

The ministry clarified in its statement that the respective airlines and Original Equipment Manufacturers (OEMs) would determine the cost of acquiring these aircraft through commercial transactions, and they have not disclosed the specific details of these transactions.

Furthermore, the ministry assured that it would ensure the availability of parking slots at the time of granting the No Objection Certificate (NOC) for the actual import of the aircraft. The timeline for importing the aircraft is scheduled between 2023 and 2035, as per the induction plans of the airlines.

The news comes amid major fleet renewal and expansion plans for both Air India and IndiGo. Tata Group-owned Air India recently made headlines when it signed a pact for a massive aircraft acquisition, potentially amounting to a staggering $70 billion at list prices. The deal entails the import of 210 A320 Neo aircraft, 140 B737 aircraft, 40 A350 aircraft, 10 B777-9 aircraft, 20 B787-9 aircraft, and 50 B737-8 aircraft.

IndiGo

IndiGo, India’s largest airline, is also gearing up for significant growth. In a historic move, the airline placed an order for 500 Airbus A320 family aircraft, marking the largest single aircraft purchase order ever made by any airline with Airbus. This order surpassed Air India’s previous record of 470 aircraft, which it had set in March.

The aircraft ordered by IndiGo include a combination of A320 Neo, A321 Neo, and A321 XLR aircraft models. The airlines expect the deliveries of these new airplanes to take place between 2030 and 2035, with the OEMs estimating the total value of the order to be approximately $50 billion.

As per the latest data for May, released by the DGCA, both Air India and IndiGo have a significant market share in the Indian aviation sector, capturing a combined 87.7% share. IndiGo holds the largest slice of the pie with 61.4% market share, followed by Air India with 9.4%, Vistara with 9%, and Air Asia with 7.9%.

The approval for aircraft import by DGCA is expected to bolster the operations and expansion plans of both Air India and IndiGo, enhancing their capacities to serve the growing demand for air travel in India. With these ambitious fleet acquisition plans, the two airlines aim to strengthen their positions in the highly competitive Indian aviation market and cater to the increasing travel needs of the country’s burgeoning population.

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