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Air India Seals $34 Billion in Aircraft Orders With Airbus and Boeing

Edward Russell
February 14th, 2023 at 11:27 AM EST

Tails of Air India planes at the Delhi airport

Air India has committed to at least 470 aircraft from Airbus and Boeing worth an estimated $34 billion as part of the Tata Group’s effort to remake the long-ailing Indian flag carrier into a global aviation leader.

The deals were unveiled Tuesday at the highest levels of government. Tata Chairman Natarajan Chandrasekaran and Airbus CEO Guillaume Faury were joined by Indian Prime Minister Narendra Modi and French President Emmanuel Macron to unveil the order for 250 Airbus planes. And the White House was the first to confirm the commitment for 220 Boeing aircraft. Both deals are letters of intent pending finalization.

Air India will take 140 A320neos, 70 A321neos, 34 A350-1000s, and six A350-900s, plus “significant options,” from Airbus, Chandrasekaran said. The Airbus commitments are worth an estimated $19 billion based on Cirium’s full-life base values.

And from Boeing, the carrier will take 190 737-8s and -10s, 20 787-9s, and 10 777-9s, plus another 70 737 and 787 options, the airframer said. The Boeing commitments, not including the options, are worth an estimated $15 billion, according to Cirium.

The dual aircraft orders are a big part of Tata’s aim to remake Air India. The company bought the long-ailing airline from the Indian government last year and has wasted no time in working to turn it around. Campbell Wilson was brought in from Singapore Airlines’ subsidiary Scoot to lead the carrier. And deals were reached in November with Malaysia’s Capital A to acquire its share of AirAsia India, and with Singapore Airlines for its stake in Vistara. AirAsia India is to be merged with Air India Express, and Vistara with Air India itself.

The blockbuster dual orders, which has parallels to American Airlines’ split order for 460 A320neos and 737 Maxes in 2011, will allow Air India to renew its fleet as well as grow. It could potentially even reclaim the unofficial crown as India’s national airline, which Emirates has long held by moving more Indian overseas travelers than any other airline.

“We are going through a massive transformation because we are committed to building a world-class airline known for safety, on-time performance, the best of Indian hospitality, and modern fleet,” Chandrasekaran said.

Of course, remaking Air India into a global leader will take more than just new aircraft. As Chandrasekaran pointed out, the airline needs to improve its operational performance and provide a customer experience that is on par with the likes of Emirates and Singapore Airlines. In short, Air India needs to become an airline people want to fly, not just have to fly.

“India is on the verge of an international air travel revolution,” Airbus’ Faury said Tuesday. Faury added that it was time to turn India into an “international hub” for global aviation.

In addition to Air India’s turnaround and expected growth, the country’s largest airline, IndiGo, is expanding at a rapid clip. Its international ambitions are somewhat smaller, given its preference for an all-narrowbody fleet, with an aim to “connect China to Africa,” as former CEO Ronojoy Dutta put it in August. IndiGo has orders for 488 A320neo family aircraft, including for the long-range A321XLR, Airbus data show.

And demographically, India surpassed China as the world’s most populous country with 1.4 billion people at the end of 2022.

Both Airbus and Boeing, in their separate comments on the Air India deal, touted their investments in India. Faury touted the European planemaker’s engineering center in Bengaluru in his prepared remarks. And Boeing on Monday unveiled plans for a new $24 million logistics center India.

Deliveries of the first A350s are scheduled for late 2023, barring any delays from Airbus’ well known supply chain issues. The delivery timeline for the rest of the order was not disclosed.

Air India and Air India Express operate 131 aircraft, including the A320 and 737 families, as well as 777 and 787 models, Cirium Fleets Analyzer shows. AirAsia India operates another 28 A320s, and Vistara 53 A320, 737, and 787 family aircraft.

Edward Russell
February 14th, 2023 at 11:27 AM EST

Tags: Asia-Pacific

Photo credit: Tails of Air India planes at the Delhi airport Flickr / Max Goth

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