Air India Express expects to induct 50-60 aircraft over the next 12-18 months, with its fleet expansion plans remaining on track despite delays, the airline’s chairman, Nipun Aggarwal, said on Wednesday.
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Air India Express currently operates a fleet of over 100 aircraft, up from around 25 about three years ago. It launched three flights from Abu Dhabi to Navi Mumbai and Indore on July 15 and to Lucknow on July 16. The airline has announced Abu Dhabi-Guwahati flights from August. Air India Express operates over 500 daily flights with a fleet of over 100 planes.
Aggarwal said the airline expects deliveries to gather pace. He added that it will also be among the early operators of the Boeing 737 MAX 10, the largest variant of the series designed for up to 230 passengers, once the aircraft receives certification. “All in all, with the order that we have, we should be getting 50-60 aircraft deliveries in the next 12 to 18 months,” Aggarwal said.
The fleet expansion comes as Air India Express continues to integrate and modernise its operations following the Tata Group’s acquisition of Air India in 2022. The airline has been harmonising its fleet and product.
Agarwal acknowledged that the transformation has faced setbacks due to factors beyond their control. “The industry has gone through several challenges, and we have been hit by multiple black swan events, which I do not think anybody could have forecasted when we started this transformation journey.”
He said supply chain disruptions, geopolitical developments, and delays in aircraft deliveries affected the pace of the group’s transformation. “The branding of the airline, the fleet modernisation, the investment in MRO [Maintenance, Repair, and Operations], the training academy, pretty much all of that is on track. Where we have suffered is the delay in deliveries, the delay in fleet retrofit.”
He added that they have been hit by external events they could have never imagined. “…we are very optimistic. It may take a little longer, but we will get there,” Aggarwal said.
As part of its fleet modernisation programme, Air India Express expects to complete the harmonisation of its narrow-body fleet by March next year. The retrofit of Air India’s Dreamliner fleet is expected to be completed by the middle of next year. The retrofit of Boeing 777 aircraft will take longer, Aggarwal said.
He added that Air India Express had restored around 90% of its West Asia operations following disruptions caused by the Iran-US conflict.
Indian airlines were forced to reroute and temporarily curtail international services after parts of West Asian airspace were shut following the conflict earlier this year. They scaled back parts of their network earlier this year after airspace closures. Higher fuel prices and longer flying times also affected operations across the region.
Agarwal said demand on routes to the region has remained strong throughout the disruptions and operational constraints. He added that passenger demand has been the biggest challenge for the airline. “The biggest impact that we have is in terms of our ability to fly into and out of the region. We are only constrained by that because the demand here is very strong. There is a large Indian diaspora.”
He said that they are back to 90% in West Asia. “As long as we can operate, we will be deploying capacity, and we will be operating.” Agarwal said that the airline is extremely bullish on the West Asia-UAE market.
The Air India Group is the largest carrier in terms of international traffic from India. Almost two-thirds of the group’s capacity and revenue come from international travel, with almost 50% coming from West Asia. “Two-thirds of that comes from the UAE market. So UAE will be a quarter of our business as a group,” Agarwal said.
Norland said the Indian traffic to Abu Dhabi is almost seven million passengers. “That becomes 24% of our traffic. Five million of them are what we call point-to-point. So that is actually people staying here. Two million are then using the network of our airlines to continue out into the world and back again.”
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“Between now and the end of next year, we should be getting 50-plus aircraft, if not more. That was the plan, and that remains on track,” Aggarwal said on the sidelines of a panel discussion featuring United Arab Emirates (UAE) culture and tourism department director Haitham Ali Khamis and Abu Dhabi airport chief commercial officer Carsten Norland in Abu Dhabi.
He said it shows that India is a strong market. “We have seen the last couple of years that the number of passengers from India coming here is growing at more than 20% every year,” Norland said.
Aggarwal said that fuel prices remain another important factor affecting airline operations, although they are not the only consideration. “If we can get back to the $90-100 oil price range, I think the industry can sustain itself and operate very effectively.”
He said that airlines have not been able to fully pass on higher fuel costs to passengers because of the industry’s price-sensitive nature. “Airfares are not at a level where we can recover the full impact of the oil price escalation that we have seen. Airfares are higher, but still not at a level where we can recover the full impact of the oil price, especially in the last quarter, because the oil price just went through the roof.”
He said they are now beginning to pull off. “Yields are still on the higher side, globally and locally. But we have to see how much these yields hold forth going forward, because the supply is also coming back. And when supply comes back, the yields obviously begin to soften. So, it is a very dynamic situation,” Agarwal said.
Aggarwal also said that the Air India Group will restore all operations to pre-March levels unless there is any further escalation or surprises they cannot forecast or predict today.
