Air India reveals purchase of 470 jets from Boeing, Airbus
LONDON — Air India has announced orders for 470 Boeing and Airbus passenger jets as it races to tap surging demand for increasingly affordable air travel from the nation’s growing ranks of middleclass consumers.
India’s largest international airline and second-largest domestic carrier is buying 220 Boeing aircraft valued at $34 billion. It marks the U.S. plane maker’s third-largest sale of all time, in dollar value, and its second of all time in quantity.
Air India is also buying 250 passenger jets from European plane manufacturer Airbus, with the orders championed by the leaders of the U.S., France and India.
The Boeing “purchase will support over 1 million American jobs across 44 states, and many will not require a four-year college degree,” President Joe Biden said Tuesday. “This announcement also reflects the strength of the U.S.-India economic partnership.”
Air India is seeking to reinvent itself by expanding its operations and modernizing its fleet. The new jets will help the airline’s owner, Tata Sons, compete against upstart discount rivals including India’s dominant carrier, IndiGo.
“India is going to be the world’s third-largest market in the aviation sector,” Indian Prime Minister Narendra Modi said in a videoconference. Over the next 15 years, it’s estimated that India will need more than 2,000 aircraft, and this “historic announcement will help in meeting this growing demand.”
The Boeing order includes 190 737 Max aircraft, 20 of its 787s, and 10 of its 777Xs. The purchase
includes customer options for an additional 50 737 Max planes and 20 of its 787s, which would make it 290 airplanes for a total of $45.9 billion at list price.
Toulouse, France-based Airbus will provide Air India 40 wide-body A350 Airbus aircraft and another 210 narrow-body A320neo planes, Tata Sons Chairman Natarajan Chandrasekaran said in the call with Modi and French President Emmanuel Macron.
Airbus did not disclose financial terms of the deal, which could be worth tens of billions of dollars.
This “is a historic moment for India, for Air India and for Airbus,” Airbus CEO Guillaume Faury said in the call. The size of the order “demonstrates the appetite for growth in the Indian aviation industry. It’s the fastest growing in the world.”
Chandrasekaran said the A350s will be used to “fly all ultralong distance across the globe.” Single-aisle A320s are typically used on short-haul routes. He said the airline has “significant options” to increase its order.
“The order’s massive, but a lot of it is long overdue replacement. Air India is way behind in modernizing their fleet,” said Brendan Sobie, a Singapore-based independent aviation
analyst.
Demand for air travel in India and elsewhere in Asia has boomed over the past decade, fueled by fast-growing economies that have raised incomes and made travel more affordable.
For Air India, “there’s a lot of catch up to do,” Sobie said. It’s competing with newer budget airlines that moved faster to tap demand on domestic services as well as foreign carriers that are formidable competitors on international routes, he added.
Tata Sons, India’s oldest and largest conglomerate, regained ownership of the debt-laden national carrier last year. The Tata Group pioneered commercial aviation in India when it launched the airline in 1932. It was taken over by the government in 1953.
Modi and Macron applauded the Airbus deal, with both saying it’s a sign of the strengthening “strategic partnership” between their countries.
Macron called the deal a “new success” and an opportunity to “develop new areas of cooperation with India.”
Tata is integrating Air India with Vistara, which it jointly runs with Singapore Airlines, and with Air Asia India, which it runs with Malaysian discount operator Air Asia.