(CNN) Air India will buy more than 200 planes from Boeing, President Joe Biden announced on Tuesday. It’s the third-biggest sale of all time for the aircraft manufacturer.
The agreement will include 190 Boeing 737 MAX, 20 Boeing 787 and 10 Boeing 777X — a total of 220 firm orders with a list price of $34 billion, the official says.
airlines Don’t pay full list price for airliners, especially if you’re placing such a large order. But even a 50% discount, which isn’t uncommon, would mean a $17 billion sale. That’s a major boost for a company that’s still struggling to recover from the slump in sales and financial losses it suffered during the pandemic and the 20-month grounding of its 737 Max after two deadly crashes.
Boeing’s 2022 revenue was $66.6 billion, up $8 billion from the 2020 revenue trough, but well below 2018’s record revenue of $101 billion before grounding lies. Boeing receives most of its sales revenue once an airplane is delivered, and the 777X has yet to be built. The aircraft in this order are years away from delivery.
Air India’s purchase also includes customer options for an additional 50 Boeing 737 MAX and 20 Boeing 787, for a total of 290 aircraft. At list price, that order would be worth $45.9 billion.
In a statement, Biden said the sale would support “over a million American jobs in 44 states, and many will not require a four-year college degree.”
“This announcement also reflects the strength of the US-India economic partnership,” Biden wrote. “Together with Prime Minister Modi, I look forward to deepening our partnership even further as we continue to address shared global challenges and create a safer and more prosperous future for all of our citizens.”
The production will support three separate manufacturing lines in the United States, have a total economic impact of $70 billion in the United States and support an estimated 1.47 million direct and indirect jobs, a White House official said Tuesday.
India has gained some manufacturing business as Western tensions flare with China, including large companies that traditionally rely heavily on Chinese manufacturing. Apple is one such company, with Trade and Industry Minister Piyush Goyal saying the tech giant already makes between 5% and 7% of its products in India.
India will overtake China this year to become the world’s most populous country. The country’s massive and cheap labor force, which includes workers with key technical skills, is a major draw for manufacturers. Asia’s third largest economy also boasts a growing domestic market. With global recession fears lingering, India is expected to remain the fastest growing major economy in the world in 2023.
If it can sustain this momentum, India could become only the third country with a GDP of $10 trillion by 2035, after the US and China, according to the Center for Economics and Business Research.
Boeing suffers
The Boeing (BA) 737 Max has been plagued by problems, but production and orders for the troubled plane have rebounded, boosted by an even bigger order from United late last year. In June, Ethiopian Airlines took delivery of a 737 Max from Boeing for the first time since the March 2019 crash that killed all 157 people on board and resulted in a 20-month grounding.
The company has many other problems in China, the world’s largest aviation market. It was on the verge of being effectively left out of the region as trade tensions between the United States and China have essentially halted sales of Boeing in the country for the past four years.
The company hasn’t announced any sales to a Chinese passenger airline since November 2017, and the country has banned the Boeing 737 Max for much longer than most countries. In January, a Boeing 737 Max took off in China for the first time since 2019.
Boeing has faced myriad problems over the past few years, aside from the drop in demand for passenger planes that has occurred during the pandemic. Deliveries of the 787 Dreamliner widebody jets resumed last year after being halted due to quality control issues.
CNN’s Chris Isidore, Diksha Madhok, Gregory Wallace, and Pierre Meilhan contributed to this report.