Air India to speed up expansion, add eight Dreamliners in 2014

Hyderabad:Air India will speed up its international expansion this year, adding eight Boeing Dreamliner 787 aircraft to its fleet, as part of its strategy to be ready for competition with more fuel-efficient aircraft, a top executive said.

“We will be adding eight Dreamliners this year. One of these has already landed yesterday (Tuesday),” said Air India chairman Rohit Nandan on the sidelines of the 4th India Aviation air show in Hyderabad. “We will replace (aircraft on) almost all the routes in South-East Asia with the 787 aircraft which is more economical.” Air India will also start flying to Moscow, Rome and Milan this year.

Talks with Italian authorities for these flights are on, Nandan said, adding that the airline is also looking at Dubai as a destination.

Air India hasn’t been affected by the bilateral rights granted to the UAE in the past, Nandan said. He hopes that the airline will be able to deal with those granted recently in the same way too.

“Air India has survived the bilaterals onslaught that was allowed 10 years back to Dubai. We have actually come out stronger,” he said.

“We hope entry into Star Alliance will help in countering this (time).”

Air India plans to join Star Alliance, the largest and most prestigious grouping of international airlines, this summer.

Air India, one of the first airlines in the world to procure the Dreamliners, is already flying them to destinations such as London, Frankfurt, Paris, Hong Kong, Sydney and Melbourne.

Apart from competing with foreign airlines on international routes, Air India will have to deal with Tata SIA Airlines Ltd and AirAsia India in the domestic market.

Nandan said he does not intend to add capacity in the domestic market immediately because growth has slowed.

Air India has inducted 12 of the Dreamliners it has ordered into its fleet. The 13th landed on Tuesday from Seattle.

Nandan rubbished talks that the airline had planned to ground Dreamliners which have witnessed glitches on some of its flights.

“We have had a spate of incidents, but these are not unusual in a new fleet. Our and Boeing engineers have reviewed the issue. There have been no safety issues in these incidents. Most incidents related to software glitches and other minor issues which have been attended to. The number of incidents are coming down.”

He said software on many planes has already been upgraded.

“Air India has no plans today to ground the planes; it is for regulators to look at. We are satisfied with the quality of service and the economics of the plane,” Nandan said.

He, however, conceded that the Dreamliner isn’t living up to its promise.

He said Air India has formed a committee and is collecting 18 months of data up to November to gauge if the plane is using more fuel than originally anticipated.

“As far as the fuel efficiency is concerned, when Air India received these planes, even at that time, we knew that the planes were heavier than what they were originally promised to be.”

Nandan said that Air India had already received compensation from Boeing for delivery delays. He did not disclose the amount.

A person familiar with the matter who asked not to be identified said that Air India has been offered $24 million by Boeing for the grounding of Dreamliners last year. The airline will take a call on the amount this week, he added. Air India is seeking close to $40 million for the grounding that came after global safety concerns with the aircraft’s batteries and which lasted a little more than four months.

Air India is unlikely to expand into the US with that country’s aviation regulator FAA downgrading India to Category-II safety rankings from Category-I because of which Indian airlines cannot add new flights into the US.

Aviation secretary Ashok Lavasa said the ministry is working with FAA on issues that led to the downgrade. This includes hiring five flight inspectors in the Directorate General of Civil Aviation.

“We intend to approach FAA for a review once this recruitment process is over,” Lavasa said. He said the ministry is also hunting for the head of Airports Authority of India.