According to industry insiders, Air India is close to making historic contracts for up to 500 jetliners worth tens of billions of dollars from both Airbus and Boeing as it carves out an ambitious revival under the Tata Group conglomerate.
The orders include up to 400 narrow-body planes and 100 or more wide-body planes, including dozens of Airbus A350s and Boeing 787s and 777s, they added, speaking on condition of anonymity as the massive transaction nears completion.
It would also enable Airbus to find a home for certain A350 manufacturing slots originally planned for Russia’s Aeroflot but now available due to war-related restrictions imposed on Moscow.
Airbus (AIR.PA) and Boeing (BA.N) both refused to comment. Air India, which is owned by the Tata Group, did not reply to a request for comment.
China delivered its first C919 airliner last week, but experts believe it is at least a decade away from competing on such a large scale.
The prospective mega-order comes just days after Tata announced the merger of Air India and Vistara, a joint venture with Singapore Airlines, to establish a larger full-service airline with a stronger footprint in local and international skies.
This agreement provides Tata a fleet of 218 aircraft, establishing Air India as the country’s biggest international airline and the country’s second largest domestic carrier behind IndiGo (INGL.NS)
Purchasing a debt-ridden property Tata has also gained crucial flight rights and landing slots with Air India, particularly to destinations in the United States and Europe.
OBSTACLES TO GROWTH
The maharajah mascot of Air India was once linked with lavishly adorned aircraft and exceptional service, but its image deteriorated in the mid-2000s as financial difficulties increased.
JRD Tata founded Air India in 1932, and it was nationalised in 1953. Tata seized control in January and has since worked to restore the airline’s status as a world-class carrier.
The order represents a desire to reclaim a significant part of travels between India’s massive overseas diaspora and cities such as Delhi and Mumbai, which are now dominated by international competitors such as Emirates.
Air India also seeks to increase its share of regional foreign traffic as well as the local market, setting up a competition with IndiGo on two fronts.
The 500 planes, which will be delivered over the next decade, will replace and increase fleets in the world’s fastest-growing air transport sector, while also contributing to Prime Minister Narendra Modi’s objective of boosting the economy to $5 trillion.
However, analysts warn that several obstacles, including poor local infrastructure, pilot shortages, and the danger of severe competition with established Gulf and other airlines, lie in the way of Air India’s goal to reclaim a major worldwide position.
It may also face delays in receiving the medium-haul Airbus A321neos planned for the Air India-Vistara alliance, since the European planemaker is sold out until 2028 or later.
According to one industry source, new Boeing 737 MAXs would most likely be delivered to Air India Express, the company’s low-cost carrier, which may be rebranded.
Insiders claim aircraft and engine manufacturers have been pounding on Air India’s door for months, with new CEO Campbell Wilson reluctant to hasten the fleet selection.
According to Reuters, Air India is spending more time studying Airbus A350s and Boeing wide-body 787 and 777 aircraft, in addition to a possible mixed order for smaller single-aisle planes.
Campbell acknowledged last month that discussions are underway to “greatly expand” Air India’s fleet over the next five years, adding, “At the risk of gross understatement, the investment will be substantial.”
