Indore Stock：What's Grounding Air India's Comeback？ Key Factors Unveiled

Two years after Tata Group acquired Air India in a $2.4 billion deal, efforts to modernise its aging fleet are being hampered by global parts shortages and ongoing flight delays, complicating the airline's ambition to become a "world-class" carrier. While supply chain issues affect airlines globally, the situation is "more acute" for Air India, according to CEO Campbell Wilson. The airline, now halfway through a five-year turnaround plan, is starting far behind rivals like Emirates and Qatar Airways, as Reuters reported.

"Our fleet is significantly outdatedIndore Stock. Most of the aircraft haven’t had any upgrades since they were delivered in 2010 and 2011, making it a more urgent challenge for us," Wilson said in SydneyJaipur Wealth Management. He added that with outdated seats and in-flight entertainment systems, Air India is operating "with one arm tied behind its back."

The challenges are most significant in the premium cabin, where Air India is focusing on attracting high-paying customers, Wilson said. The airline has already placed substantial orders for new aircraft and launched a $400 million initiative to refurbish its older planes as part of its transformation.

Manufacturers, lessors, and investors — including Singapore Airlines, which will hold a 25 per cent stake in Air India from November and has pledged up to $600 million in additional investment — are closely watching the airline's restructuring after years of decline under state ownership.

"Air India still has a long way to go to meet international standards, and it needs to complete the fleet refurbishment with new and retrofitted aircraft," said Brendan Sobie, an independent aviation analyst based in Singapore.

Air India’s reputation largely depends on quickly deploying aircraft with premium seats and services to win back customers, especially those hesitant to book due to the current product quality and risk of delays. Of the 470 planes on order, 70 are wide-body jets. The airline has already received six Airbus A350s and leased 11 Boeing 777s.

Air India is refitting 67 planes, beginning with 27 narrow-body aircraft expected to be completed by mid-2025, aiming to compete with domestic rival IndiGo’s more modern fleet. However, delays in receiving customised business and first-class seats have pushed the start of wide-body aircraft refurbishments to early 2025. Wilson noted that seat manufacturers are facing shortages of skilled labor and capacity.Kanpur Investment

Once the refurbishment begins, it will take about two years to bring the wide-body fleet up to international standards, Wilson said. Currently, older aircraft are reducing daily utilisation by about an hour on average, with even greater impacts on long-haul routes like those to the US.

To mitigate the issue in the short term, Air India is reserving its most profitable long-haul routes, such as Mumbai to San Francisco and Delhi to London, for its more modern planes.

In the fiscal year ending March, Air India increased its capacity by 21 per cent and improved passenger load factors, cutting net losses by 60 per cent to $532 million and growing revenue by 24.5 per cent to $6.15 billion. "When we can charge what the product is worth and passengers trust our reliability and service, we can focus on more high-yield routes and regain premium customers," Wilson said, though he did not specify when the airline might reach profitability.

When Tata regained control in 2022, Air India's infrastructure was outdated, operations were disorganised, and 30 aircraft were grounded due to a lack of spare parts. "It was in complete disarray. We spent the first six months just stabilizing the situation," Wilson said.

By October 1, Air India will complete the merger of its low-cost carriers, Air India Express and AirAsia India, and by November 12, it will integrate Vistara, a joint venture between Tata and Singapore Airlines.Jaipur Stock

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