Air India seals ‘record’ 500-plane deal with Boeing, Airbus: Report

Air India has reportedly signed agreements with airplane manufacturers, the US-based Boeing and France-based Airbus, for a massive order of around 500 aircraft, which would be the single largest purchase order in the history of global commercial aviation, according to Reuters.

According to unidentified persons who are aware of the stage of the negotiations, the airline has decided on the broad parameters of the deal with the two airplane manufacturers and may make an announcement next week.

Also read: Air India may buy 500 Boeing, Airbus jets in historic deal: Report

The sources said Boeing could obtain an order for around 220 aircraft, including 190 of its 737 Max narrow-body jets, 20 787 Dreamliners, and 10 777Xs, while Airbus may be asked to supply around 250 planes, including 210 A320 Neos and 40 wide-body A350s.

The exact details of the complicated deal, which has been under negotiation for several months, will be clear after the formal announcement is made.

There was no official comment from Air India or either of the manufacturers.

Air India keen to capitalize on growth in travel

The Tata Group’s flagship airline is keen to capitalize on the potential growth in global travel as the world, including China, opens up after the COVID-19 pandemic.

Air India is preparing to tackle the stiff competition from low-cost carriers and established regional airlines like the Emirates and Qatar Airways by building a fleet of fuel-efficient planes that would reduce costs and help it offer a higher level of service to flyers.

The airline is also hoping to grab a large share of the Indian market, which has been catered to largely by the Gulf carriers in ferrying passengers to the US, Europe, and other international destinations.

Also read: Tata to merge Vistara with Air India; Singapore Airlines to hold 25.1% stake in merged entity

To be able to offer a wide range of destinations to its customers, Air India found it crucial to ensure a sufficiently large fleet of new planes, given the long gestation period for the manufacture and supply of aircraft.

The Indian government finally sold Air India to the Tata Group last year, after several decades of trying to find a buyer for the airline that kept incurring huge losses over the years.

Tata Group consolidating airline business

The Tata Group is planning to integrate its airline business, which currently includes four brands. It announced last year that it would merge Vistara with Air India, after which Singapore Airlines would have a 25.1 per cent stake in the new entity.

For Boeing and Airbus, this purchase would be a shot in the arm, especially after the COVID pandemic had a drastic effect on air travel worldwide. Both the manufacturers have gained from the growth in the Indian aviation industry in the past couple of decades.

Just about four years ago, in 2019, Airbus received a bonanza with an order for 300 narrow-bodied planes from IndiGo, a deal that was worth more than $33 billion.

(With agency inputs)