Thursday, September 29, 2022

Air India wants to capture 30% market share by 2027: Here's a peek into its plan

Ever since Campbell Wilson took charge as CEO & MD in the last week of July, there seems to be a lot of action at Air India. Within a month of several aircraft returning to its fleet, the airline has inked lease agreements for 30 new planes. That’s not all. Air India has announced ‘Vihaan. AI’, a five-year road map to transform into a “world-class global Indian carrier with an Indian heart”. Wilson says its fleet expansion “will involve a combination of both narrow-bodied- and wide-bodied aircraft to cater to varied network needs”. As part of the programme, the airline is looking at capturing 30 per cent market share by 2027. But industry experts estimate that with both the market and competitive intensity set to increase with the launch of new airlines, Air India needs to target higher than the trend-line market growth rate. “There is a distinct shift happening in the Indian skies with emphasis on regional connectivity. As a full-service carrier, penetrating this cost-conscious market would be a challenge. Also, the growth will be dispersed and hence there is a need to find individual sweet spots,” says Jagannarayan Padmanabhan, Director & Practice Leader for Transport & Logistics at CRISIL Infrastructure Advisory. So, it makes sense for the carrier to significantly enhance capacity, he adds.

But to make the most of the new planes, the airline may need to reorient its strategy. “On the international segment, the traffic on Air India, including its subsidiary Air India Express, continues to be skewed towards the Middle-East... As more direct flights are launched and traffic picks up, this needs correction,” says Satyendra Pandey, Managing Partner at aviation advisory AT-TV. The carrier will induct five Boeing 777-200LRs between December 2022 and March 2023 to deploy them on routes from major Indian metros to San Francisco and New York. Then, four Airbus 321 aircraft are expected to join the fleet in Q1CY2023, while the 21 A320 planes will be inducted in the second half of the year. These will be deployed on domestic sectors and short-haul international routes. Besides, the airline is said to be considering buying 300 narrow-body jets.

29/09/22 Manish Pant/Business Today

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