Air India’s Maharaja returned home with the Tata Group after 69 years in January last year and with a promise to make it a ‘world class airline’. According to reports, Vistara could soon merge with Air India. Vistara is a joint venture of Tata Sons Pvt. Ltd and Singapore Airlines Ltd (SIA), wherein Tata Sons holds 51 per cent stake and Singapore Airlines owns 49 per cent stake. According to media reports Tata Sons has already held exploratory and preliminary talks with Singapore Airlines (SIA), for a potential merger of the airline with Air India.
Following which, the Singaporean carrier has requested for a period until the end of 2023 to come to a conclusion as to whether it would permit such a move. “The Tatas and Singapore Airlines discussed the merger possibility earlier this year. SIA had even agreed to join the Tata bid for Air India, but because of the pandemic it decided to back out given its poor financial condition,” media report said.
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Earlier this month, Air India’s mega order of 470 aircraft has become the forefront of expectations of driving growth in the Indian aviation market. This coupled with big orders from other domestic airlines has raised a series of hopes for the aviation sector. More than 1,100 aircraft orders have lined up. This is expected to reduce reliance on international carriers and increase passenger penetration in domestic carriers, hence, scaling up growth. Air India has signed letters of intent with the two leading aircraft makers Airbus of France and Boeing of the United States of America. Under the deal, Air India will acquire around 250 fleets from Airbus, and 220 fleets from Boeing.
Surely, the expansion in fleet will lead to more traffic. The sky over India is poised to witness the clash of the titans as the number of airports in the country, are also rapidly growing. This will ensure better connectivity with smaller towns and cities across India. The civil aviation industry after infrastructure has emerged as one of the fastest growing industries in the country during the last three years. Also, India arguably has become the third largest domestic aviation market on this planet earth.
The country’s largest airline in terms of market share, Indigo is already set to take deliveries of around 500 planes, while Go First will add 72 aircraft to its fleet size. New entrant Akasa Air is also in line to get 56 planes, and Air India owner’s another carrier Vistara also has 17 aircraft orders. SpiceJet too has aircraft on order. These are narrow-body planes. Taking into consideration the above, Indian carriers including Air India’s latest massive order, are set to receive 1,115 planes shortly.
As far as traffic movement is concerned, experts in aviation industry shared data that in India, pre-Covid traffic came in around 75 million international passengers. And from this total, about 60-65 per cent of the passengers used foreign carriers. With India’s economy growing and disposable income growing, there is a huge potential for Indians to travel abroad and this 75 million passengers are likely to go to 120-125 million over the next ten years. They also believe that Air India with this new order of new aircrafts has secured their growth plans for at least a decade. Air India’s latest order means strengthening the star alliance community, which in turn would offer more options to Indian as well as South East Asian passengers into Europe and US, and probably on better pricing.
Air India will receive the first of the new aircraft later this year, with the bulk to arrive from mid-2025 onwards. The fare is also likely to come down as the competition is going to grow rapidly in coming months. In fact, soon after the orders were placed by Air India, President Biden of the United States also mentioned that with this order to Boeing by Air India it will help his country generate over a million jobs. Likewise, the job market in India’s aviation sector is also going to surge.
