Air India to purchase 10 Boeing 787-8 Dreamliners from China Southern Airlines: Here’s what you need to know

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In a significant move that could benefit Air India’s growth strategy, China Southern Airlines has announced the sale of its entire fleet of 10 Boeing 787-8 Dreamliners, presenting a prime opportunity for the Tata Group-owned carrier to bolster its long-haul operations and accelerate network expansion.

This sale comes as part of China Southern’s broader fleet restructuring initiative and offers a strategic chance for Air India to acquire pre-owned, low-hour Dreamliners at a potentially reduced price.

The sale, structured to be completed between 2025 and 2026, includes the 10 Boeing 787-8 aircraft along with two spare engines.

The aircraft, originally delivered in May 2013, have an average age of 11 years, making them attractive for airlines looking to modernize their fleets without incurring the costs associated with new-build aircraft.

China Southern has set strict terms, requiring interested buyers to acquire the entire fleet along with the engines, with proposals due by November 25, 2024.

Qualified bidders will receive detailed technical specifications and condition reports by November 30, 2024.

Why Air India Should Move Quickly

Air India, currently undergoing a major restructuring under the Tata Group, is in a critical phase of fleet expansion to meet increasing demand for both domestic and international services.

The addition of 10 Boeing 787-8 Dreamliners would significantly enhance Air India’s ability to expand its long-haul network, especially from major hubs like Mumbai (BOM) and Bengaluru (BLR), and would provide operational synergies with its existing widebody fleet.

Aviation analyst Ravreet Singh suggests that the acquisition of these Dreamliners aligns perfectly with Air India’s growth trajectory.

The aircraft’s cabin configurations and engine commonality with Air India’s current fleet would simplify integration, reducing both operational disruptions and retrofit costs.

With 18 business class and 248 economy seats, the China Southern Boeing 787-8’s layout is nearly identical to Air India’s existing 787s, which feature 18 business class and 238 economy seats, providing a seamless operational fit.

The 787-8’s GE engines also match those used in Air India’s current widebody fleet, making the technical adaptation process more straightforward.

These factors present a compelling case for Air India to move swiftly to secure the aircraft, especially given the anticipated cost savings from acquiring pre-owned Dreamliners at a reduced price compared to new aircraft deliveries.

Competing with IndiGo and Expanding International Reach

Air India faces increasing competition from low-cost carrier IndiGo, which has ramped up its international expansion efforts.

IndiGo is aiming for a 25% growth in international routes, with plans to operate to over 40 destinations by the end of FY25-26, up from 35 overseas destinations.

To stay competitive, Air India must continue to enhance its long-haul capabilities, and the addition of the 787-8s could provide the necessary fleet strength to compete with IndiGo’s growing international footprint.

While Air India Group has focused on domestic and metro routes with its full-service division, it has also been placing a strong emphasis on international routes.

Recent operational challenges, such as the cancellation of 60 flights to the U.S. during the winter peak travel season, have underscored the need for additional aircraft.

The acquisition of these 787-8 Dreamliners would allow Air India to free up its larger 777s and A350s for European routes, while deploying the 787s on high-demand, medium- to long-haul services.

A Vital Fleet Expansion

Air India’s fleet currently comprises 67 widebody aircraft, including 27 Boeing 777s, 6 Airbus A350s, and 34 Boeing 787s. The addition of 10 Boeing 787-8s would increase its long-haul fleet significantly, positioning the airline to better meet demand on both existing and new routes.

Air India is also on track to receive additional widebody aircraft, but with production delays and supply chain challenges, the acquisition of China Southern’s 787-8s could provide the carrier with immediate capacity.

However, Singh advises that while the aircraft present a valuable opportunity, Air India must conduct thorough due diligence.

Potential high maintenance costs, retrofit expenses, and the overall condition of the aircraft could offset the financial benefits, making it crucial for Air India to weigh these factors carefully before committing to the purchase.

As Air India looks to rebuild and expand, acquiring China Southern’s Boeing 787-8 fleet could be a game-changing move in its quest to enhance its global reach and strengthen its position in the competitive international market.