Tata Group Air India Orders 250 Airbus Aircraft for Fleet Expansion
Tata Sons have announced their intention to purchase 250 aircraft from Airbus, Europe’s leading manufacturer. Forty A350 wide-body planes and 210 narrow-body aircraft will be acquired by Air India, which has not purchased any new aircraft since 2005. The last order was for 111 aircraft, valued at USD 10.8 billion. This will mark the first new aircraft purchase for Air India in over 16 years.
Natarajan Chandrasekaran, the Chairman of Tata Sons, proudly declared that the company has established a strong partnership with Airbus. The two firms have come to an agreement to purchase 250 aircraft, which was announced during a virtual event. The event was attended by Prime Minister Narendra Modi and French President Emmanuel Macron. To formalize this transaction, a letter of intent has been signed between Tata Sons and Airbus.
Since acquiring Air India last year, the Tata Group has been in talks with aircraft manufacturers to upgrade their fleet. CEO Campbell has declared that Air India’s goal is to reach 30% share of domestic and international flights from India. To accomplish this, ultra-long flights will be executed using wide-body aircraft.
The acquisition of new narrowbody planes will enable the airline to serve short-haul destinations within a four- to the five-hour range, thus becoming a competitor to IndiGo, which currently has more than 50% of the domestic market. Additionally, the airline’s investment in widebody aircraft will significantly expand its reach to North America, Europe, and Australia.
Tata Group or Sons – merging AirAsia India and Air India Express
Tata Sons are bringing together its business by merging AirAsia India and Air India Express into a single, cost-efficient unit. Also, Vistara will be absorbed into Air India. As a part of its ownership change, Air India has come back to service 10 narrowbody and six widebody aircraft that had been grounded. Moreover, the company has launched a project worth $400 million. To renovate the interiors of its widebody fleet, which consists of 27 Boeing 787-8 and 13 Boeing 777 aircraft.
As Air India is set to add around 50 planes by the end of FY24, its capacity will increase by a whopping 50%. This, combined with the retirement of older aircraft and the improvement of products. It will lead to a decrease in the unit cost of the airline and bring it closer to net profitability. A source aware of the development has informed ET Bureau of this. Additionally, on January 27, Wilson announced that Air India is currently in the process of finalizing a historic order of new aircraft.
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