Air India To Buy 470 Aircraft From Airbus, Boeing In A Historic Order
This is the first aircraft acquisition by Air India after it was taken over by Tata Group last year.
Air India Ltd. will buy 470 aircraft from U.S.-based Boeing Co. and European manufacturer Airbus SE in the biggest aircraft order in the history of commercial aviation.
“Air India is on a large transformation journey across safety, customer service, technology, engineering, network and human resources. Modern, efficient fleet is a fundamental component of this transformation," N Chandrasekaran, chairman of Tata Sons Pvt. and Air India, said in a statement.
The airline will buy 220 aircraft from Boeing in a deal valued at $34 billion, with an option to add 70 more in the future, PTI reported quoting U.S. President Joe Biden. It will include 190 narrow-body 737 MAXs, 20 wide-body 787s, and 10 777-9s wide-bodied planes.
"I am proud to announce today the purchase of over 200 American-made aircraft through a historic agreement between Air India and Boeing," U.S. President Joe Biden said in a statement.
"This announcement also reflects the strength of the U.S.-India economic partnership. Together with Prime Minister Modi, I look forward to deepening our partnership even further as we continue to confront shared global challenges, creating a more secure and prosperous future for all of our citizens," he said.
The deal with Boeing follows the announcement of purchase of 250 aircraft from Airbus earlier on Tuesday.
The A350 aircraft will be powered by Rolls-Royce engines, and the B777/787s by engines from GE Aerospace, Air India said in a statement. All single-aisle aircraft will be powered by engines from CFM International, it said.
The previous single-largest such order was American Airlines' 2011 order for 460 planes, Bloomberg reported.
The letter of intent, signed by Tata Sons Pvt. with Airbus, includes 40 wide-body A350 planes and 210 narrow-body A320 aircraft. "We also have significant options to increase the fleet order once we grow," N Chandrasekaran, said in a virtual meeting to announce the deal with Airbus.
This is the first aircraft acquisition by Air India, after it was taken over by Tata Group last year. The order is reportedly part of a bigger deal of around 500 aircraft in total, where the rest of the planes will be delivered by U.S.-based Boeing, making it the biggest such deal in commercial aviation's history.
Delivery Timeline
The first of the new aircraft will enter service in late 2023, with the bulk of aircraft set to arrive from mid-2025 onwards, Air India said. In the meanwhile, the airline has already started taking delivery of 11 leased B777 and 25 A320 aircraft to accelerate its fleet and network expansion.
Air India plans to expand international routes with 20 787-9 Dreamliners and options for 20 more jets, while becoming the newest 777X customer with a selection of 10 777-9s, Boeing said in a press release.
The 737 MAX will provide flexibility across Air India's domestic and international network, while reducing fuel use and emissions by 20% compared to the airplanes it replaces, it said.
Big Milestone In Turnaround
The deal is another huge step in a series of decisions to overhaul the airline's operations and make it a strong competitor in both international and domestic markets.
A younger and more fuel-efficient fleet will allow the company to compete with local low-cost rivals like IndiGo, and Gulf giants, such as Emirates or Qatar Airways, in the international markets.
"This order is an important step in realising Air India’s ambition, articulated in its Vihaan.AI transformation program, to offer a world-class proposition serving global travellers with an Indian heart," Chandrasekaran said, in the statement.
He also said these new aircraft will modernise the airline’s fleet and onboard product, and dramatically expand its global network.
The former national carrier has already announced plans to merge AirAsia India and Air India Express to form a low-cost carrier AIX Connect Pvt., while Vistara will combine with Air India to form a bigger full-service carrier.
The airline has committed $400 million to refurbish the interiors of its entire wide-body fleet. It will also establish an information technology centre and a training academy to ensure efficient operations.
The acquisition of new aircraft, which will come with an entirely new cabin interior, complements Air India’s previously announced plan to refit its existing wide-body B787 and B777 aircraft with new seats and inflight entertainment systems, Air India said. The first of these re-fitted aircraft will enter service in mid-2024.
(Updates an earlier version to add details of the Boeing plane deal)