Air India has sealed a jumbo deal for nearly 500 new planes worth more than $100 billion at list prices, industry sources told Reuters, in what could become the largest order by any airline as it lands under new owners.
The evenly split deal between France’s Airbus and rival aircraft maker Boeing, first reported by Reuters in December, could finally be announced as early as next week, the sources said.
Air India has agreed to buy 250 Airbus aircraft, split between 210 single-aisle A320neos and 40 widebody A350s, and 220 Boeing aircraft, including 190 of its 737 MAX narrowbody jets, 20 787 widebodies and 10 777Xs .
While Airbus and Air India signed the agreement on Friday, Boeing agreed its deal with the airline on January 27, a year after the Tatas took back ownership of the former state-run carrier.
The order reflects Air India’s strategy to modernize its aging fleet and reclaim a substantial share of travel between India’s large overseas diaspora and cities such as Delhi and Mumbai, primarily on its young Emirates aircraft. As Gulf rivals dominate.
The deal for 400 narrowbodies will allow Air India to win regional international traffic and a greater share of the domestic market, leading to a two-front battle with IndiGo.
While the Airbus figure is slightly less than the 275 originally envisaged, the sources did not rule out provision by Air India for top-up acquisitions or leases later.
It was not immediately clear to what extent the agreement includes options on numbers that could change the total tally when a final order comes.
The record orders are aimed at catapulting Air India into the league of big global airlines and making it an influential client for planners and suppliers at a time when its home market is witnessing a post-COVID-19 travel boom.
Air India, with its Maharaja mascot, was once known for its luxuriously decorated planes and stellar service, but its reputation declined as the financial crisis escalated in the mid-2000s.
Under its new owners, the airline is looking to restore its reputation at home and abroad as a one-stop carrier with impeccable service and world-class aircraft.