Air India Agreed to Purchase 500 Aircraft From Airbus, Boeing

Air India completed massive deals with Airbus and Boeing to buy 500 new aircraft worth more than $100 billion at list prices. The airliner’s deal could be the largest single order ever by an airline, as Air India looks to reinvent the company under new ownership. The deal will be split equally between the two rival airplane manufacturers and could be announced as early as next week. The deal will include 250 Airbus planes, 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.

Airbus and Air India announced their deal on Friday, while Boeing signed the agreement with the airline on Jan. 27, exactly a year after Indian conglomerate Tata regained ownership of the former state-owned carrier.

In a note to employees on Jan. 27, Air India said it was “finalizing a historic order for new aircraft”.

Air India has been looking to renew its aging fleet as the company aims to re-capture share of trips between the country’s large overseas diaspora and cities such as Delhi and Mumbai, a route which is largely dominated by Gulf carriers like Emirates with their newer planes.

The deal for 400 narrowbodies will also allow Air India to win a bigger share of regional international traffic and the domestic market, setting up a battle on both fronts with the country’s low-cost carrier IndiGo.

The Airbus agreement was initially expected to include 275 aircraft but Air India went with a lower figure for the time being. Still, the carrier may top-up acquisitions or leases at a later point.

It was not immediately clear to what extent the numbers in the agreement included options that could change the total tally when the final orders are in.

The record order aims to put Air India in the league of large global airlines and make it an influential customer for planemakers and suppliers at a time when its home market is seeing a strong post-COVID-19 travel surge.

Under new ownership, the airline is looking to restore its reputation at home and abroad as a storied carrier with impeccable service and world-class planes.

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