Air India's Ambitious Fleet Overhaul Hits Significant Delays
Four years after the Tata Group took over, Air India's massive $400 million program to retrofit and modernize its aging aircraft fleet is running substantially behind schedule. The project, critical to the airline's international expansion and brand revitalization, is now facing delays of up to two years, according to chief executive Campbell Wilson.
Supply Chain Bottlenecks Hamper Progress
Wilson confirmed that while the retrofit program remains on budget, timelines have slipped significantly due to post-pandemic supply chain disruptions affecting aircraft interiors and regulatory approvals. "Most of that cost is the procurement and production of seats. It is just a matter of when those seats are delivered," Wilson explained in an interview. "From a timing perspective, there were some delays in production of some of the seats by the manufacturers, and in the certification of some of those seats."
The modernization of Air India's narrow-body aircraft is nearly complete, but the wide-body fleet—which forms the backbone of the airline's long-haul network—remains largely untouched. The Boeing 787 retrofit is approximately one year behind schedule, while the Boeing 777 program is nearly two years behind original timelines.
Seat Supplier Exit Compounds Delays
The situation worsened when one seat supplier unexpectedly exited the program despite having committed to it. "We got right to the point where we had designed the product and were doing the final inspections of the prototypes, and that OEM told us they couldn't continue the programme," Wilson revealed. "They had overcommitted their resources. That cost us two years."
Wilson emphasized that the problems aren't unique to Air India, attributing the delays to "post-Covid supply challenges that many OEMs (original equipment manufacturers) faced." The seats being replaced are obsolete and difficult to maintain because spare parts are hard to procure or manufacture, creating additional operational challenges.
Multiple Constraints on Growth
The retrofit delays compound another significant constraint on Air India's growth: delayed aircraft deliveries from manufacturers. Wilson noted that aircraft deliveries from Airbus and Boeing are running about a year behind original schedules. By early 2026, Air India had expected to receive nearly 40 wide-body aircraft but has taken delivery of only two.
"When you layer in the retrofit delay and the delivery delay, it's just pushed back the product upgradation and the expansion plans that we had," Wilson acknowledged. However, he added that deliveries have now started moving again and that the airline isn't currently seeing fresh warning signs from manufacturers.
Vihaan.AI Transformation Progress
Under Vihaan.AI, the five-year transformation plan launched after Wilson took charge in July 2022, Air India has been overhauling multiple aspects of its operations:
- Fleet interiors and cabin upgrades
- Airport lounges and passenger facilities
- Digital systems and booking platforms
- Training processes and service standards
"Most of the heavy lifting (under Vihaan.AI) is finished," Wilson stated. "All of the design, all of the certification, all of that is done. What remains is the mechanical rollout."
Using a cricket analogy to describe the transformation progress, Wilson said: "I think, clearly, we are, may be in the morning of the fifth day (of a Test match)." The airline plans to operate around 20 aircraft with new interiors in 2026, while the full retrofit across the fleet will take another two to three years.
Operational and Financial Challenges
The slow pace of upgrades has intersected with concerns over aircraft condition. A recent civil aviation ministry report submitted to Parliament revealed that at least three out of every four Air India group planes had recurring defects. Of 267 planes tested, recurring defects were found in 191.
Air India executives clarified that most of these defects weren't safety-related but involved issues such as older seats, torn seat covers, and loose or non-functioning tray tables or screens—problems attributable to the age of the fleet and delays in the retrofit program.
Financially, the Air India group reported revenue of ₹78,636 crore in FY25, representing a 15% increase. However, losses widened to ₹10,589 crore from ₹7,356.3 crore a year earlier. Wilson cited multiple external factors affecting performance, including geopolitical tensions, global political changes, tariffs, visa restrictions, and airspace closures.
Expert Skepticism and Future Outlook
Despite the progress, aviation experts remain cautious about whether cabin upgrades alone will restore Air India's competitive position. Mark D Martin, an aviation expert and chief executive at Gurugram-based Marting Consulting, noted: "Air India's mainstay revenue continues to come from its legacy 'hand-me-down' A320 Fleet which needs both immediate retrofit and modernization."
Martin questioned why Air India isn't actively using its A350 fleet on key European routes, which would help improve overall product and service quality. He added: "Some of their transformation programs, while good really don't do much in terms of winning loyalty... All that is being done appears to be merely cosmetic, something travellers don't really care in today's competitive airline market."
Wilson countered that the airline is already seeing revenue benefits on routes where new aircraft and interiors are deployed, particularly on flights to New York, London, Dubai, Singapore, and domestic routes. "We can see a material uplift," he said, expressing confidence that the broader rollout of upgraded aircraft will eventually strengthen brand loyalty and pricing power.
As Air India continues its transformation journey, the airline faces the dual challenge of catching up on delayed modernization while competing in an increasingly demanding global aviation market. The full completion of the retrofit program, as Wilson noted, "won't be until the last aircraft is fitted."
