Air India places record aircraft order that could change aviation landscape
Carrier ‘on a large transformation journey’, says chairperson after largest deal ever struck by single airline
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Your support makes all the difference.Tata group-owned Air India has announced a record purchase order for hundreds of aircraft from two of the world’s main aircraft manufacturers, Airbus and Boeing.
The deal is the largest ever struck by a single airline and comes as the demand for travel has shot up significantly in the aftermath of the Covid pandemic.
The order is for 470 aircraft, of which 250 will come from Airbus while 220 craft will be supplied by US-based Boeing.
The multibillion-dollar deal is a new record for the aviation industry and comes as Air India – infamous for having a reputation as a loss-making airline – seeks to expand its business globally.
The new fleet will include 40 Airbus A350s, 20 Boeing 787s and 10 Boeing 777-9s widebody aircraft. The A350 aircraft will be reportedly powered by Rolls-Royce engines, while the B777 or 787s will have engines from GE Aerospace.
The Airbus order includes 210 A320neo narrowbody planes, which Air India will use to fly “ultra-long routes”.
The first new aircraft will enter service by the end of this year and the bulk will come in mid-2025, the airline said in a statement.
“Air India is on a large transformation journey,” chairperson N Chandrasekaran said in a statement.
“This order is an important step in realising Air India’s ambition... to offer a world-class proposition serving global travellers with an Indian heart.”
He added that the new aircraft will modernise the carrier’s fleet and onboard product while “dramatically expanding” its global network.
The deal was finalised in London after months of clandestine talks that were carried out “a stone’s throw from Buckingham palace”, with confidentiality over the deal finally being lifted on Tuesday.
It was in the pipeline for over a year, but serious talks began last summer and continued till days before Christmas when outlines were drawn, Reuters reported, citing insiders.
“Air India negotiated hard and the team is very sharp despite having no prior aviation experience. They compare with some of the best dealmakers in the business,” said one of the insiders.
Air India’s last aircraft deal was signed 17 years ago, when it ordered 68 Boeing and 43 Airbus aircraft.
The order comes just a year after an exchange in the airline’s ownership put a spotlight on the airline’s turbulent history.
The carrier was founded in 1932 by the Tata Group but was later nationalised. A year back, the government sold the carrier back to the Tata conglomerate.
The new deal is seen as new CEO Campbell Wilson’s efforts to revive the carrier’s reputation. The airline was once known to be the epitome of luxury air travel in India, with decorated planes and stellar service.
But it lost its market share to budget airlines and financial troubles mounted in the mid 2000s.
India’s prime minister Narendra Modi hailed the agreement during a video ceremony with French president Emmanuel Macron.
“This important deal shows, along with the deepening of relations between India and France, the successes and aspirations of the civil aviation sector in India,” Mr Modi said.
The French president said: “This achievement shows that Airbus and all its French partners are fully dedicated to developing new areas of dedication with India.”
US president Joe Biden called the agreement “historic” and a sign of a “deepening partnership” between the two nations.
“This purchase will support over one million American jobs across 44 states, and many will not require a four-year college degree,” he said.
British prime minister Rishi Sunak said it was one of the “biggest export deals to India in decades and a huge win for the UK’s aerospace sector”. He said it will create new jobs.
The new deal comes at a time when the travel sector faces a rising post-pandemic demand, along with mounting industrial and environmental pressures.
“It is important for the industry because given the recent turbulence in the China market, the alternative growth market is India,” said independent aviation adviser Bertrand Grabowski.
“India is also sending a strong political signal that it wants to remain attached to the West at a time when it has appeared ambiguous on Russian sanctions.”
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