Air India order accounts for 25% of Boeing, Airbus pre-Covid book

The largest-ever global order of aircraft by Air India accounted for around a quarter of the pre-pandemic annual order book of manufacturers Airbus and Boeing.

An under-penetrated Indian market may mean more large orders ahead. This comes even as plane makers’ delivery numbers remain below pre-pandemic levels.

Earlier this week, Tata group-owned Air India announced a mega order for 470 new aircraft from Airbus (250) and Boeing (220). This is the biggest order globally, ahead of American Airlines’ 2011 order for 460 aircraft.

This is equivalent to 23 per cent of the average annual orders that Airbus received in five years up to the pandemic, shows a Business Standard analysis of the company’s order book.

It is 27 per cent of the five-year pre-pandemic average numbers for Boeing. Air India also has the option to buy another 370 jets, potentially taking the total order to 840 planes. 

The order book over five years leading to the pandemic was considered because there was a sharp decline in orders during the pandemic.

Airbus had orders for 1,066 planes on average in the five years ending 2019. The number for Boeing was 823. Both saw a significant decline during Covid. 

Airbus orders fell 64 per cent to 383 in 2020. Boeing orders declined 78 per cent from the previous five-year average to 184 in 2020.

Orders have since bounced back. Airbus had orders for 1,078 planes in 2022, higher than the 1,066 planes, which was the five-year annual average before Covid.

Boeing had 935 aircraft orders, also higher than the pre-pandemic figure of 823.

Deliveries haven’t quite caught up yet. Airbus delivered 663 aircraft in 2022.

This is 11 per cent lower than the pre-pandemic five-year annual average figure of 741. Boeing’s 480 deliveries in 2022 were 31 per cent lower than the pre-pandemic five-year annual average figure of 692.

But more orders could be coming, according to aviation advisory and research firm Centre for Asia Pacific Aviation India (CAPA India).

It expects the equivalent of more than three times of Air India’s 470 aircraft orders to materialise over the next two years or so.

“Based on CAPA India’s proprietary traffic forecasts for the next decade and beyond, combined with our assessment of aircraft retirement cycles, we expect that Indian carriers will place orders for around 1,500-1,700 aircraft,” it said in a February 2023 report.

Currently, India has under 800 aircraft of which IndiGo accounts for 500, it noted.

There have been multiple instances where deliveries were delayed because of engines not being available due to supply chain issues. This situation is expected to improve by financial year FY24, according to CAPA. 

Manufacturers still have a large number of backlog orders, noted the report. Airbus and Boeing together have 12,669 unfulfilled orders as of December-end 2022, according to the report.

Other Indian carriers, including Akasa, Go First will need to place new orders. SpiceJet will need to get its current order fulfilled and plan for expansion. Even Air India would need to place another large order, it noted.