Although Air India has lucrative landing slots, the TATA group faces an uphill task to upgrade Air India’s aging fleet and turn around its financials and service levels.
Tata-Group-owned Air India has already started showing signs of a major revamp. In an attempt to infuse a fresh lease of life in the ailing Air India and its aging fleet, Tata Group is in talks with aircraft manufacturers – Boeing and Airbus.
Tata Group last month won control of the struggling Air India carrier after bidding an enterprise value of 180 billion rupees. Now the board is in talks with Boeing and Airbus for an order for a raft of new planes to modernize the Air India fleet for a whopping USD 2.4 billion. According to sources, the Tata board is in talks with OEMs lessors for jets including Airbus A350-900s and Boeing 787-9 Dreamliners. As per the sources, discussions are on for narrow-body jets that form the mainstay of Air India’s domestic and short-haul operations, as well as wide-body aircraft capable of flying as far as the U.S.
Currently, the talks are at a preliminary stage, with Tata Sons assessing the right fleet mix and no decisions taken yet on aircraft type or order size.
Air India, once known for its premium services and advertisements that featured Bollywood stars, has lucrative landing and parking slots at almost all major airports around the world. But it faces stiff competition from foreign airlines with non-stop services to India, as well as carriers operating from hubs in the Middle East.
Natarajan Chandrasekaran, chairman of the Tata Group, told Air India employees earlier this month at an internal company briefing, “In terms of fleet, we know we have work to do. We will address it with utmost urgency. We’ll upgrade our fleet, we’ll bring modernity in our fleet, we’ll bring a new fleet.”
The average fleet age of the Air India fleet is over 10 years. Air India currently has 153 planes in its fleet. That includes 49 wide-body aircraft manufactured by Boeing and Airbus, including jets from the best-selling 737 and 320 families, making it a complicated mix considering each aircraft type requires separate skill sets of pilots and crew. Air India, one of the world’s first buyers of the Boeing Dreamliner, operates the oldest versions of the fuel-efficient workhorse, although several of them remain grounded due to a lack of parts.
Air India with its maharajah mascot, was once renowned for its lavishly decorated planes and stellar service championed by founder JRD Tata. Air India was founded in 1932 and nationalized in 1953.
Since the mid-2000s, however, Air India’s reputation has declined as financial troubles mounted. It flew widebody planes with business class seats in poor repair and grounded some of its new 787s to use for spare parts.
No comment was immediately available from any of the companies involved.
