Airline Boom
Air India, the largest international airline and second-largest domestic carrier in India, is buying 470 Boeing and Airbus passenger jets as it seeks to modernize its fleet and tap into the increasing demand for affordable air travel from the country’s expanding middle class. This purchase is the United States plane maker's third-largest sale of all time, in dollar value, and its second of all time in quantity. The financial terms of the deal were not disclosed, but the order could be worth tens of billions of dollars. Over the next 15 years, it is estimated that India will need more than 2,000 aircraft, and the purchase of these planes will be done by Air India. Air India is a carrier seeking to reinvent itself and expand its operations, and this boom in airline demand will help Tata Sons, Air India's owner, compete against upstart discount rivals, including India's dominant carrier, IndiGo. This massive order provided a one in a lifetime for Air India to compete against plane giants in an industry where the winner usually takes all. US President Joe Biden called the agreement "historic," and Indian Prime Minister Narendra Modi applauded the deal as a sign of the strengthening “strategic partnership” between India and other countries. The demand for air travel in India and elsewhere in Asia has grown substantially over the past decade, fueled by fast-growing economies that have raised incomes and made travel more affordable for millions of people. Brendan Sobie, a Singapore-based aviation analyst said, “There’s a lot of catch-ups to do” for Air India, as it is competing with newer budget airlines that moved faster to tap demand on domestic services as well as foreign carriers that are giant competitors on international routes.
https://www.aljazeera.com/economy/2023/2/15/air-india-announces-orders-for-470-boeing-airbus-jets
3 comments:
This is very interesting. I never knew air India was the largest international airline. With international travel becoming a stronger market I wonder what it could mean for current, thriving airlines in the United States. Will the industry become more competitive? Is there much more innovation ahead for flying?
If Air India is trying to compete with budget airlines, then how does spending more money on planes help that situation? I would assume with newer planes and growth that they would be charging even more for tickets, which would drive consumers even further away.
I think it would be interesting to see the original post if you don't mind sharing! I think that it will be interesting to see how this plays out for Air India. It sounds like they are trying to stay current with the expansion of the middle class but will it work out for them? I assume only time will tell.
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