- Boeing is part of the deal with an expected order of 220 aircraft sources
- At 470, Air India’s deal will be the largest single deal by an airline
- Agreement between Air India and Airbus to strengthen India-France ties
- Air India wants to compete with Gulf carriers with new aircraft
BENGALURU/PARIS, Feb 14 (Portal) – Air India has agreed to buy 250 jets from Airbus (AIR.PA), part of a mammoth deal of 470 planes, which is also expected to include 220 jets from Boeing (BA.N), as The airline heralds a decade-long transformation under its new owners, the Tata Group.
The Airbus order includes 210 narrow-body A320neo aircraft and 40 wide-body A350s, which Air India will use to fly “ultra-long routes around the world,” Tata Chairman N Chandrasekaran said on Tuesday.
The combined 470 jet order is the largest by any single airline. Along with around 25 other Airbus jets that Air India intends to lease to meet its immediate needs, it reaches the 500 mark, confirming a magnitude first reported by Portal in December.
Analysts said it shows India’s ambition to be one of the world’s largest aviation markets, with its growing base of aviators and a large diaspora around the world.
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The order also marks a turning point for Air India, which under new CEO Campbell Wilson is working to revitalize its reputation as a world-class airline and shake off its image as a late, run-down operation with an aging fleet and poor service.
“One of the most important things is a modern fleet that is efficient and suitable for all routes,” Chandrasekaran said during a virtual press conference.
The online event was attended by Indian Prime Minister Narendra Modi and French President Emmanuel Macron, emphasizing the political and economic importance of a deal involving India’s former flag-bearer.
“This important agreement, along with the deepening of India-France ties, demonstrates the achievements and aspirations of the civil aviation sector in India. Today, civil aviation is an integral part of India’s growth,” said Modi.
According to industry sources, India has repeatedly lobbied for Airbus to add a final assembly line in the country to match a plant in northern China, but the planemaker has rejected the idea for financial and industrial reasons.
But the aviation deal is expected to have other industrial by-products, with Macron pledging France will work with India beyond planes.
“This achievement shows that Airbus and all its French partners are fully committed to developing new areas of engagement with India,” Macron said during the video presentation.
Chandrasekaran said Airbus and Tata are working on larger partnerships, including ambitions “to introduce commercial aircraft construction at some point in the future”.
INDIA’S GROWING INFLUENCE
Air India’s order tops American Airlines’ (AAL.O) combined order of 460 Airbus and Boeing aircraft more than a decade ago.
Even after significant anticipated rebates, the deal would be worth tens of billions of dollars at a volatile time for aircraft giants, whose jets are back in demand after the pandemic but are facing mounting industrial and environmental pressures.
“It is important for the industry because given the recent turmoil in the Chinese market, India is the alternative growth market,” said independent aviation consultant Bertrand Grabowski.
“India is also sending a strong political signal that it wants to stay connected to the West at a time when it seems ambiguous about Russian sanctions,” said Grabowski, a former banker with extensive experience financing international aviation deals.
The deal also includes a major commercial win for engine manufacturer CFM International, a joint venture between General Electric (GE.N) and French company Safran (SAF.PA). It was chosen to power 210 Airbus narrowbody jets ahead of rival Pratt & Whitney (RTX.N), while larger aircraft will be powered by GE or Britain’s Rolls-Royce (RR.L).
British Prime Minister Rishi Sunak said the deal between Air India, Airbus and Rolls-Royce will create new jobs.
“By building trade links with growing economic powerhouses like India, we will ensure British companies remain at the forefront of global growth and innovation,” he said in a statement.
Air India, with its Maharajah mascot, was once known for its lavishly decorated aircraft and outstanding service, but its reputation declined in the mid-2000s as financial troubles mounted.
The record-breaking order aims to propel Air India into the league of major global airlines and make it an influential customer for aircraft manufacturers and suppliers as the home market sees a surge in travel post-COVID-19.
It reflects a strategy to recapture a solid share of travel between the Indian diaspora and cities like Delhi and Mumbai, which are currently dominated by foreign competitors like Emirates.
It will also put Air India on a stronger footing to compete with domestic rival IndiGo, which has a majority share of the Indian market and a strong position in regional flights.
Reporting by Aditi Shah in Bengaluru and Tim Hepher in Paris Additional reporting by Shilpa Jamkhandikar Editing by Jamie Freed and Mark Potter
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