India has emerged as a fast-growing aviation market in the last two decades, now standing as the third-largest in the world. With the market only growing further, Airbus and Boeing have moved quickly to cash in on this demand, selling hundreds of aircraft to carriers in the country. However, as new players emerge and existing ones expand, both planemakers are more focused than ever on India. Let’s take a look at their presence in India today and in the future.
For the low-cost dominated and razor-thin margin market of India, efficiency and capacity are the bread and butter for airlines. This has meant the Airbus A320 and Boeing 737 families have emerged as the foremost planes in the airline fleets, accounting for roughly 85% of planes operating in India today.
However, the rivalry between Airbus and Boeing is intense, with both jockeying for massive aircraft orders in recent years. Boeing began the century with a strong advantage in the market. Jet Airways, then the largest airline, used the 737 for its domestic and short-haul international routes and had substantial orders for future types. Airbus was relatively behind, with Indian Airlines (later merged with Air India) and Kingfisher being its biggest customers.
The carrier is working towards getting its AOC revalidated. Photo: Getty Images
However, the market was moving toward a huge disruption: low-cost airlines. From 2005 onwards, three major budget airlines arrived on the market scene: SpiceJet, IndiGo, and GoAir (now Go First). With a clean slate of aircraft orders, Airbus and Boeing scrambled to provide new fleets. However, these budget carriers had major orders in mind, breaking national records in terms of value.
The first significant order for Airbus from India came from low-cost giant IndiGo. The then-startup carrier ordered 100 Airbus A320s, a multi-billion deal and the biggest of any Indian airline at the time (only recently beaten). This greatly increased Airbus’ order book in the country and began catching up to Boeing.
Boeing had been supplying planes to Jet Airways and Air India, which took on new 737s, 747s, and 777s, making it a lucrative deal. While GoAir also opted for the A320 family, Boeing bagged SpiceJet as its first major budget airline deal. However, the shift in market share had already begun.
Photo: Hafit Irawan / Shutterstock
IndiGo continued to double down on the A320 family, ordering another 180 A320neos in 2011. Meanwhile, Boeing was suddenly struggling to find large aircraft orders in India. Air India stopped ordering new planes from the American giant after 2006, and Jet Airways’ growth had slowed in the face of intense competition from budget airlines. While deliveries of the 787 and 777 would carry on for years, new orders were becoming tougher to come by.
SpiceJet had taken delivery of nearly two dozen 737s by 2011, helping Boeing’s deliveries. However, GoAir had also taken a dozen planes from Airbus and had many more scheduled for delivery. The balance had begun shifting.
All in and bust
With the release of the 737 MAX in 2014, Boeing suddenly received a shot in the arm. SpiceJet and Jet Airways both ordered a massive 200 aircraft each to replace their 737NGs and grow their market presence. After a few years of order droughts, Boeing finally had a plane that sparked an interest.
Airbus wasn’t too far behind, however. The European giant saw orders from GoAir for 72 new A320neos in 2011. IndiGo followed up its own record-breaking order with another one for 250 A320neos, keeping Airbus and Boeing neck and neck heading in the late 2010s.
Photo: Yatrik Sheth | Shutterstock
However, fast forward a few years, and Boeing was in big trouble. Jet Airways’ financial woes had meant it was taking fewer planes than anticipated, hurting deliveries. However, the biggest blow was the grounding of the 737 MAX in March 2019. Just a month later, Jet Airways officially went bankrupt, suspending all flights and canceling orders.
Suddenly, Boeing’s market presence in India disappeared (at the time). The number of active 737s fell by over 50% as lessors quickly seized planes, and Boeing’s order book for the MAX was halved nearly overnight. SpiceJet also had to pause MAX deliveries, hurting its own expansion. While the low-cost carrier absorbed nearly 30 Jet 737NGs, these were temporary while the MAX remained grounded.
While Boeing dealt with crisis after crisis in India, Airbus had a much smoother ride. Air India (narrowbodies), GoAir, Vistara, AirAsia India, and IndiGo were all relying exclusively on the Airbus A320 family for its operations. Combined, these airlines have orders for over 800 aircraft, with IndiGo being Airbus’ biggest global customer.
The A320neo has become the most popular plane in India, dominating fleets across carriers. Meanwhile, the 737 has slowly been sliding down in popularity in recent years. Currently, Air India Express operates a fleet of 26 and SpiceJet flies 46.
As of today, the 737 accounts for less than 15% of India’s operating narrowbody aircraft. The A320 family accounts for a much biggest 85%. While this gap was looking certain to expand, recent changes have brought Boeing back into the fold.
New and old players return
Just as many were preparing to write Boeing’s obituary in India, thanks to a troubled SpiceJet and stagnant Air India Express, 2022 changed the game. Startup carrier Akasa Air kicked things off by ordering 72 737 MAXs at the end of 2021 and rapidly began deliveries last year, now totaling an impressive 19 planes. We spoke to co-founder Neelu Khatri about the airline’s first six months of flying and its goals for the future. Hint: it involves a lot more planes, and potentially another three-figure order soon.
However, the real game-changer was Air India (freshly privatized and revitalized) and its 470 jet order. 220 of these planes are headed to Boeing, consisting of 190 737 MAXs, 20 787s, and 10 777Xs. While the carrier hasn’t revealed whether the MAXs will go to low-cost arm AIX Connect (combining AI Express and AirAsia India) or the mainline fleet, the 737 is back in the Indian skies in a big way.
Widebodies account for a tiny part of India’s aviation market (<10%). However, they are poised to grow in the coming years as new airlines enter the fray and demand for international demand rises. This was long a Boeing stomping ground, holding a 100% market share currently, but a figure that will change very soon thanks to Air India.
The flag carrier currently flies 27 787s and 19 777s. This figure will rise with the aforementioned Boeing order for 30 new widebodies as well as nine more leased 777s. However, Airbus is finally crashing the widebody part in India, thanks to an order for 40 A350s. This will put the European planemaker into the mix for the first time in a decade, and while it has less than half the market, it’s a huge increase from zero.
Vistara is the only other widebody operator but will be merged into the flag carrier by next year. It operates three 787-9s with a total of seven set to join.
When we originally published this article in August 2021, it looked like Airbus would be the undisputed leader of the market. Fast-forward under two years and Boeing is very much a real challenger and is showing no signs of losing momentum. While Air India’s order still favors Airbus with 250 jets, of which 210 will be A320neo family aircraft, the strong emphasis on Boeing shows that this decade and beyond presents a huge opportunity for both planemakers.
What do you think about the future of the Indian aviation market? Let us know in the comments!