Air India’s Fleet Expansion: 100+ Aircraft & $400M Retrofit

Air India is poised for a significant fleet expansion, planning to introduce over 100 new aircraft across its full-service and low-cost operations by 2027 and 2028.

Strategic Fleet Growth and Modernization

This aggressive growth strategy is complemented by a substantial $400 million legacy fleet retrofit program, aimed at modernizing its existing aircraft. The airline continues to induct both retrofitted and brand-new planes to enhance its capacity and service.

• 16 Boeing 787-8 Dreamliners are targeted for near-full retrofit by the end of 2027, with the narrowbody program already complete.
• Three retrofitted Boeing 787-8s have been inducted this year, with four more expected by the end of 2026.
• Three new Boeing 787-9s were received in 2026, and two Airbus A350-1000s are scheduled for delivery later this year.

Navigating Elevated Operating Costs and Geopolitical Shifts

The airline’s expansion unfolds against a backdrop of considerable operational challenges, significantly impacting its cost structure. Geopolitical events have particularly strained international routes and increased expenses.

• Elevated operating costs stem from geopolitical disruptions, including the closure of Pakistani airspace, extending flight times by up to three hours on European and North American routes.
• The conflict in Iran has further contributed to increased fuel and operational expenses.
• A depreciating rupee and reduced demand on India-US routes, influenced by visa restrictions and trade uncertainties, also add pressure.

Operational Improvements Amidst Profitability Drive

Despite these external pressures, Air India has demonstrated significant internal operational improvements, signaling a positive shift in its service delivery. These gains are crucial as the airline prioritizes its financial health.

• The airline achieved its highest-ever on-time performance (OTP) of 91.6% in June.
• Fiscal Year 2027 year-to-date OTP stands at 85%, a notable increase from 76% in FY26.
• Widebody technical dispatch reliability has improved to 97.4%.
• Customer loyalty, measured by the net promoter score, saw a substantial rise from -35 in FY23 to +37 in FY27 year-to-date.

Profitability remains a core objective for Air India as it continues to invest in both its fleet and ground operations. Further strengthening its internal structure, annual salary increments for all employees, including ground staff and cabin crew, are set for October 1.