A Landmark Deal: Air India to complete an order for up to 500 jets
As it carves out an ambitious resurrection under the Tata Group conglomerate, Air India is reportedly close to signing historic contracts for up to 500 jetliners worth tens of billions of dollars from both Airbus and Boeing.
They said, speaking on the condition of anonymity as the enormous transaction approached its conclusion, “The orders include up to 400 narrow-body aircraft and 100 or more wide-body aircraft, including dozens of Airbus A350s and Boeing 787s and 777s.”
Such a deal might be among the largest ever made by a single airline in terms of volume, surpassing American Airlines’ combined order for 460 Airbus and Boeing aircraft from more than ten years ago, and would likely exceed $100 billion at list prices, including any options. Even with significant anticipated discounts, the sale, which would be worth tens of billions of dollars, would bring an end to a difficult year for an industry whose planes are once again in demand as a result of the epidemic but which is also dealing with growing industrial and environmental challenges.
Neither Boeing nor Airbus said anything about it. In response to a request for comment, Air India, owned by the Tata Group, was silent. After Tata stated that Air India and Vistara, a joint venture with Singapore Airlines, will merge to form a larger full-service carrier and expand its presence in both local and international skies, the prospective order was reported just a few days later.
Tata will have 218 aircraft after acquiring that fleet, making Air India the largest international airline in the country and the second-largest domestic airline after IndiGo. As its financial troubles deepened, Air India, with its maharajah mascot, witnessed a decline in its reputation for its lavishly adorned aircraft and first-rate service. 1953 saw the acquisition of Air India by the government, which JRD Tata started in 1932.
After regaining control in January, Tata has been attempting to restore its standing as a premier airline. The anticipated order represents an intentional attempt to reclaim a significant portion of traffic flows to and from India, which are now controlled by foreign carriers like Emirates. In addition, Air India intends to compete with IndiGo for a larger share of the domestic market as well as regional international travel.
The 500 aircraft will be delivered over a minimum of ten years, and they will aid Prime Minister Narendra Modi in achieving his goal of increasing the country’s economy to $5 trillion while replacing and growing fleets in the aviation sector, which is currently expanding at the fastest rate in the world.
Experts do warn that a number of challenges stand in the way of Air India’s goal to recover a significant position globally, including a lack of pilots, insufficient local infrastructure, and the threat of severe competition from established Gulf and other airlines.
When financial difficulties began to worsen in the mid-2000s, the reputation of Air India’s maharajah mascot, which was once associated with lavishly adorned aircraft and first-rate service, started to fade. The ranking reflects a plan to reclaim a large portion of travel between India’s vast diaspora abroad and major cities like Delhi and Mumbai, which are serviced by international rivals like Emirates.
In addition, Air India intends to compete with IndiGo for a larger share of the domestic market as well as regional international travel. As the European aircraft manufacturer is sold out until 2028 or later, it might also have trouble getting the medium-haul Airbus A321neos bought for the Air India-Vistara partnership as swiftly as it would like.
According to a source in the industry, Air India Express, the company’s low-cost carrier, which may be given a new name, will most likely receive new Boeing 737 MAX aircraft. According to insiders, aircraft and engine manufacturers have been knocking on Air India’s door for months, but the airline’s new CEO Campbell Wilson has refused to rush the decision, which could make or break its fleet.
According to a July report from Reuters, Air India was taking extra time to research wide-body Airbus A350 and Boeing 787 and 777 models in addition to a possible mixed order for more affordable single-aisle aircraft. Campbell stated last month that there are plans to “greatly expand” Air India’s fleet over the next five years and warned against excessively understating the magnitude of the investment.
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