Air India has struck a huge deal for about 500 new planes worth more than $100 billion at list prices, in what could become the single biggest order of any airline trying to reinvent itself under its new owners, industry sources said. The deal, split equally between France’s Airbus and rival plane maker Boeing, was reported by Reuters in December and could finally be announced as early as next week, the sources said.
Air India has agreed to buy 250 Airbus planes, split between 210 single-aisle A320neos and 40 wide-body A350s, and 220 Boeing planes, including 190 of its 737 MAX narrow-body jets, 20 787 widebodies and 10 777Xs. While Airbus and Air India signed the deal on Friday, Boeing reached an agreement with the airline on January 27, the date Tata regained ownership of the former state carrier, sources told.
Airbus declined to comment. Air India did not immediately respond to an email seeking comment outside normal business hours. In a Jan. 27 memo to employees, the airline said it was “completing a historic order for new aircraft.”
The order reflects Air India’s strategy to modernize its aging fleet and regain a solid share of travel between India’s large overseas diaspora and cities such as Delhi and Mumbai, which are mainly dominated by Gulf rivals such as Emirates with its young aircraft.
The deal for 400 narrow-gauge routes will also allow Air India to capture a larger share of regional international traffic and the domestic market, giving it a two-front battle with IndiGo. While the Airbus figure is slightly lower than the 275 originally projected, the sources did not rule out Air India making additional acquisitions or leases later.
It was not immediately clear to what extent the numbers in the deal include options that could change the total when orders are final. The record order aims to put Air India in the league of major global airlines and make it an influential customer for aircraft manufacturers and suppliers at a time when its domestic market is experiencing a strong increase in travel following the COVID-19 pandemic.
Air India, with its maharaja mascot, was once known for its lavishly decorated aircraft and stellar service, but its reputation declined in the mid-2000s as financial difficulties mounted. Under its new owners, the airline aims to restore its reputation at home and abroad as a legendary carrier with impeccable service and world-class aircraft.
