Aircraft makers, till recently, were slashing jobs worldwide thanks to the record losses in the pandemic period. Now, they are facing record orders. Little over a year after the lifting of travel restrictions, the world has seen a surge in air travel. Swaraj Baggonkar takes a look at the increase and the preparedness of Indian carriers

Jump in aircraft orders

Following the easing of Covid-19 restrictions globally, pent-up demand has pushed air travel to new highs. As per the International Civil Aviation Organisation, global air travel is set to soar to pre-pandemic levels in 2023, led by the US, Europe, and China.

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Demand in India isn’t far behind. As per the Directorate General of Civil Aviation (DGCA), airlines in India carried 123.3 million domestic passengers in 2022, close to the 144.1 million that flew in 2019, the pre-pandemic year. In 2023, an estimated 150-155 million people are expected to take to the skies. As this upward growth trajectory is expected to be consistent, airlines around the world are placing orders now; the deliveries are expected to take place in later years. The orders are a reflection of anticipated future demand.

Order size from Indian carriers

Considering confirmed orders of Air India and IndiGo—two of India’s biggest airlines, controlling nearly 80% market share—the total order book by Indian carriers is of approximately 1,150 aircraft. These orders are for single- and double-aisle, wide and narrow body types, placed with Airbus and Boeing.

If Air India’s record-breaking confirmed order of 470 air planes wasn’t large enough, the Tata group-controlled airline has the option to extend its order to a staggering 840 aircraft. IndiGo, India’s largest carrier, is awaiting deliveries of 480 aircraft from Airbus while newcomer Akasa Air, which has 55 jets yet to be delivered, is preparing for placing a ‘significantly’ large order later this year. Full-service carrier Vistara, which is set to be merged into Air India, will add another 17 aircraft to its fleet while low-cost carrier SpiceJet has around 130 aircraft on order.

Backlog at Boeing, Airbus

As per December 2022 disclosures, both Airbus and Boeing have confirmed orders for more than 11,700 commercial aircraft. Airbus, the world’s largest aircraft manufacturer, has the lion’s share of this, with over 7,200 orders, while Boeing has 4,500 pending orders. While Airbus’s monthly production rate is 55 aircraft, that of Boeing stands at 31 per month.

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Air India’s mammoth order of 220 aircraft is expected to account for one-fourth of Boeing’s yearly orders while, for Airbus, its 250-aircraft order could translate to 30% of the manufacturer’s yearly order intake. Both Airbus and Boeing are ramping up capacity over the next two years by 45%, which would still be insufficient to meet demand. At the current rate of production, the average waiting period for delivery of aircraft stands at more than eight years. On top, airlines in the other countries can be expected to expand their fleets, too.

What is the composition of the Indian orders and does the country have the appetite for so many aircraft

Air India’s Boeing order comprises 190 units of 737 Max, 20 units of 787-9 and 10 units of 777-9. It has also ordered 140 units of A320, 70 units of A321, 34 units of A350-1000 and 6 units of A350-900 from Airbus. IndiGo is readying itself to induct more than 300 units of the A320 and A321XLR. Akasa Air’s and SpiceJet’s pending orders comprise only units of 737 Max. Jet 2.0 is yet to start operations, but its new promoters are keen on full-service operation, with 111 narrow and wide body aircraft.

India has one of the least penetrated air travel markets in the world but its aviation growth has had an 11% CAGR in the last decade. In 2016, the Centre started the UDAN (Ude Desh ka Aam Nagrik) scheme to connect the hinterlands at affordable prices. More than 215,000 UDAN flights, carrying over 11 million passengers, have flown since.

The Centre aims to revive/develop 100 unserved and underserved airports, heliports, water aerodromes by 2024. Six airports have been privatised recently and the government has earmarked 25 more for privatisation over the next five years. Several new greenfield airports are also in the pipeline. All of this will push up the need for air connectivity.

* 150-155 mn domestic air passengers expected in 2023

* 1,150 aircraft ordered by Indian Airlines

* 55 & 31 respective monthly production rate for Airbus & Boeing

* 8 years expected period of wait for delivery of current orders