Air India seals world's largest aircraft deal at $70 bn, orders 470 planes

A year after coming into the Tata group, Air India on Tuesday said it had placed an order for 470 planes: 250 with European plane maker Airbus and 220 with American giant Boeing — the world’s largest ever single-tranche aircraft purchase.

By doing this it has eclipsed American Airlines’ 2011 order for 460 planes.

At list price the aircraft deal is valued at over $70 billion.

From Airbus, Air India has ordered 40 wide-body A350 planes and 210 narrow-body A320neo family planes, and it has the option to increase the size of this order.

From Boeing, the airline has ordered 10 wide-body B777X planes, 20 wide-body B787 planes, and 190 narrow-body B737MAX planes, with an option for an additional 20 B787s and 50 B737MAXs.

A wide-body plane has a bigger fuel tank, allowing it to traverse directly on longer distances such as India-US routes.

Along with the aircraft order, Air India has signed deals with engine manufacturers: CFM International (for narrow-body A320/B737s), GE (for Boeing 777x/787), and Rolls-Royce for A350 type planes.

The first aircraft to arrive will be 25 Boeing 737s and six Airbus A350-900s in the second half of 2023. 

Air India had last ordered planes in 2006, when it had booked 111 aircraft: 68 from Boeing and 43 from Airbus.

Prime Minister Narendra Modi on Tuesday attended a video call with French President Emmanuel Macron on the Airbus-Air India deal. He called it a “landmark deal”, demonstrating not just deep relations between India and France but also India’s success and expectations in the civil aviation sector.

In a statement, US President Joe Biden called the Boeing-Air India deal a “historic” one.

Biden said: “This announcement also reflects the strength of the US-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.”

Air India’s order comes after months of intense negotiations between the airline, aircraft makers, and engine original equipment manufacturers. This order has been billed as a sign of growing confidence and collaboration among India, France, and the US.

Tata Sons Chairman N Chandrasekaran, who was present during the aforementioned video call, said Air India was undergoing a “massive transformation”, for which it needed a modern, efficient fleet.

“Today, I am happy to say that we have signed a letter of intent to acquire 250 aircraft from Airbus. 40 of them would be wide body A350 aircraft that we will use to fly all ultra-long distances across the globe. 210 will be narrow body aircraft. We also have significant options to increase the fleet order once we grow,” Chandrasekaran noted.

He said Air India was working on bigger partnerships with Airbus and “one of our ambitions for the country is to bring in commercial aircraft manufacturing sometime in the future”.

Chandrasekaran called this the “most significant moment” for Air India, Indian aviation, and the manufacturing sector in India.

The time is right to turn India into an international aviation hub, said Airbus Chief Executive Officer (CEO) Guillaume Faury, adding that the A350 aircraft would become a new flagship for transcontinental travel even as the A320neo plane would remain the flagship for domestic and regional service.

“Make in India” is at the heart of Airbus’ strategy in India, he said. While the Air India planes will finally be assembled in France and Germany, many of their components will come from Indian companies, he said.

“The critical technologies will come and we are going in that direction from the Airbus India Engineering Centre in Bengaluru,” Faury noted.

Air India CEO Campbell Wilson wrote in a staff email: “Besides this deal being of unprecedented size it was also incredibly complex with two airfamers and six engine suppliers jostling for position.”
 

“Air India's selection of Boeing's family of passenger jets shows their confidence in our products and services in the world's fastest growing aviation market," said Stan Deal, president and CEO of Boeing commercial airplanes.