On Monday, December 5, Air India closed a lease agreement for six Airbus A320neo and six Boeing 777-300ER aircraft, which are expected to enter the fleet during the first four months of 2023. The new aircraft join the previous agreement, made in September, for 30 aircraft: 21 Airbus A320neo, four A321neo and five Boeing 777-200LRs.
The forty-two aircraft would be delivered over a period of fifteen months. Both deals are aimed at capturing 30% of India’s domestic and international market share.
The announcement comes just days after the merger with Vistara and AirAsia India was agreed. Singapore Airlines (SIA) currently owns 49% of Vistara, with the remaining 51% held by Tata Sons, while Air India has been owned by the Indian holding company (including Air India Express and AirAsia India) since January this year.
To materialize the merger, which is expected to occur in March 2024, SIA will invest USD 250 million in Air India, thus obtaining 25.1% of the shares of the new group it will form with Vistara. But additional capital injections from Tata and SIA to fund the growth of the new Air India could reach USD 615 million, depending on the progress of the business plan and access to other funding options.
See also: Air India takes delivery of its first Boeing 777-200LR ex-Delta and will have flights between Mumbai and New York
Aircraft leasing and de-preservation
Like the first deal, the Airbus A320neo would focus on domestic and short-haul international routes. It currently has 27 aircraft of the same model, in addition to 20 A319s, nine A320ceo and 20 A321s.
On the other hand, the Boeing 777-300ERs will allow it to open more long-haul routes and will join its widebody fleet of three Boeing 777-200LRs, thirteen Boeing 777-300ERs and 27 Boeing 787-8s.
The distinctive feature of the Boeing 777s ordered is that they will be configured in four classes: a premium economy segment will be added to the existing economy, business and first classes.
In recent weeks, the carrier has increased its presence in Europe, Canada and the United States, with more flights to San Francisco, London (from seven Indian cities), Birmingham and Vancouver. It would also return its operations to Copenhagen, Milan and Vienna; and add flights from Mumbai to New York, Paris and Frankfurt.
In addition to the lease announcements, the company stated that they have de-prioritized nineteen aircraft that were grounded for a long time, while nine more aircraft are expected to join the fleet.
According to Ch-Aviation, the company has twenty-five aircraft still on the ground: four Boeing 787s, two Boeing 777s, eleven Airbus A319s, seven A321s and one A320neo.