Air India to stay on expansion course despite challenges

Air India is expanding its fleet with over 100 new aircraft by 2028 and plans to retrofit 16 Boeing 787-8 Dreamliners by the end of 2027. The airline's $400 million legacy fleet retrofit program is on track, with three retrofitted Dreamliners already inducted this year and four more expected by the end of 2026. Additionally, Air India received three Boeing 787-9s in 2026 and expects deliveries of two Airbus A350-1000s later this year. The expansion targets both Air India and Air India Express. Challenges include higher operating costs due to geopolitical disruptions, longer flight times (up to three hours due to Pakistani airspace closure), fuel costs linked to the Iran conflict, a weaker rupee, and softer India-US demand amid visa restrictions. Despite these challenges, Air India has improved its on-time performance to 91.6% in June (highest ever) and 85% year-to-date in FY27, up from 76% in FY26. Customer loyalty, measured by net promoter score, rose to +37 in FY27 year-to-date from -35 in FY23. Profitability remains a priority, with Campbell Wilson announcing salary increments for employees in October.