Within the past 12 months, Indian airlines have collectively placed order of 1,120 aircraft. According to a recent report from CAPA India, this number is expected to rise further by March next year. The current order book of airlines will witness growth with the addition of 380 more aircraft.
Last year, Air India and IndiGo signed mammoth deals at Paris Airshow 2023. The airlines ordered 470 and 500 jets respectively. At Wings India 2024, Akasa Air has placed an order of 150 Boeing 737 MAX 8, increasing its order book from 76 to 226.
Air India Expected to Grow Order Book
Air India, the mainline carrier of the TATA Group, is expected to expand its order book by converting some of its options to a firm order. In 2023, Air India signed a huge deal with Airbus and Boeing. In February, they officially announced the order in the virtual presence of the Head of State from France, the United States of America, and India.
Air India placed an order of 470 aircraft. This included 210 Airbus A320 family, 190 B737 MAX family, 40 A350, 20 B787 and 10 B777X aircraft. Furthermore, the airline secured purchase rights for 370 aircraft, which we generally call options. These options provide airlines with the flexibility to exercise them according to the terms agreed upon in the signed agreement.
In a now-deleted LinkedIn post by Air India Chief Commercial Officer Nipun Aggarwal, he confirmed that the airline has placed 470 firm orders and 370 options. He also confirmed that the airline has gone for the long-range Narrowbody aircraft Airbus A321XLR, as part of the 210 A320 family order. Now, CAPA India predicts that Air India will convert some of these options to firm orders.
Order Book to Reach 2,000
Indian Airlines have a lot of aircraft on order. If we exclude the orders placed by SpiceJet and GoFirst, Indian airlines currently have an orderbook of 1,620 aircraft. More than 900 of these will be delivered to IndiGo. With the addition of 380 more aircraft by March, this order book will cross the 2,000 mark.
According to CAPA India, these additions will be used by airlines to increase their presence in the domestic as well as international markets. Apart from Air India conversion, other airlines may also place additional orders. For instance, IndiGo is expected to place a widebody order.
SpiceJet and GoFirst have been excluded from our order book count because of their inconsistent balance sheets. GoFirst has been grounded for eight months now. It is under insolvency proceedings. Meanwhile, SpiceJet has recently received a new lifeline in the form of new funding. It has received approval from the Bombay Stock Exchange (BSE) for raising funds worth Rs 2,250 crore by issuing equity shares & warrants.
A report from the Economic Times also said that the airline was in talks with Boeing to resume deliveries of Boeing 737 MAX aircraft. SpiceJet has not received delivery of a single Boeing 737 MAX since the FAA grounded the aircraft type after suffering two fatal crashes.
In summary, the Indian aviation sector is expanding rapidly, as evidenced by the 1,120 aircraft that airlines have ordered in the last year alone. By March, an extra 380 aircraft are expected to be added to the order book. Notably, Air India’s calculated decisions—such as converting options to firm orders—are important factors.
With SpiceJet and GoFirst excluded, the total order book is expected to exceed 2,000 aircraft, which will increase the carriers’ market share both domestically and globally. Even if certain carriers continue to face difficulties, including GoFirst’s bankruptcy and SpiceJet’s negotiations with Boeing, the industry’s resiliency and growth point to a bright future.
Source: Business Standard