Air India Ltd. announced a 250 plane order with Airbus SE as part of what stands to be the largest aircraft purchase in commercial aviation history, underscoring the industry’s recovery from the coronavirus pandemic and the airline’s ambition to become a global force after years of contraction.
(Bloomberg) — Air India Ltd. announced a 250 plane order with Airbus SE as part of what stands to be the largest aircraft purchase in commercial aviation history, underscoring the industry’s recovery from the coronavirus pandemic and the airline’s ambition to become a global force after years of contraction.
The carrier signed a letter of intent to purchase 210 A320neo family jets as well as 40 A350s, Tata Group Chairman N Chandrasekaran said in an online briefing that was also attended by Indian Prime Minister Narendra Modi and French President Emmanuel Macron. Air India also has “significant options” to increase its order as the carrier grows, Chandrasekaran said.
“The time is right for India to turn into an international hub,” Guillaume Faury, Airbus Chief Executive Officer said in the briefing. “India is well on its way.”
The long-awaited transaction, reported by Bloomberg News last week, will help Air India reinvent itself by stocking its ranks with a fuel-efficient fleet that can take on domestic low-cost rivals and powerful Gulf airlines. Boeing Co. is also set to win a sizeable order that could be announced later.
The Airbus deal is potentially worth about $16 billion based on current market value for the most popular variant of the models, although airlines tend to get steep discounts on large orders. The manufacturer no longer publishes list prices.
Founded under Tata in the 1930s, Air India is attempting to win back traffic from Emirates and Qatar Airways, which have built a business model ferrying Indians to the US and Europe via their huge hubs in Dubai and Doha.
Air India’s mega deal is part of a push to expand India’s aviation industry, Modi said at the briefing. The country wants to be a hub for maintenance and repair operations for the region as well.
The order also comes as airlines globally upgrade and refresh their fleets to cash in on the rapid rebound in travel after Covid. Locking in fresh aircraft commitments is key for Air India’s expansion plan as the supply of newly built aircraft becomes increasingly constrained.
–With assistance from Anurag Kotoky.
(Updates with comment from Prime Minister Modi in sixth paragraph.)
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