Air India Set To Enter Largest Deal In Commercial Aircraft History: Here's Everything You Need To Know

With around 300 narrowbody jets being part of the deal, Air India Ltd. will create history as it is one of the biggest orders in commercial aircraft history. Under its new ownership, Air India might buy Airbus SE A320neo jets, Boeing Co.'s 737 Max, or a mix of both, according to sources. The order of 300 737 Max-10 aeroplanes is worth around $ 40.5 billion without bulk discounts.

The manufacturing and delivery of this order by Air India might take years or decades to complete. Airbus created 50 narrowbody planes in one month, intending to increase production to 65 and 75 per month, likely to be done by 2023-2025, as cited in the Mint.

Implications On The Indian Aviation Industry

The order would be a 'coup' for Boeing in India, as Airbus, a rival manufacturer, currently dominates Indian skies. India was the fastest-growing aviation market globally before the Covid-19 pandemic. IndiGo, part of InterGlobe Aviation Ltd., is the world's largest customer for narrowbody jets made in Europe. It orders approximately 700, and Go Airlines India Ltd., Vistara, and Air Asia India Ltd. use similar models of planes, as reported by NDTV.

Air India and Boeing officials offered no comments on the ongoing deal. At the same time, a representative of Airbus has stated that "the company is always in contact with existing and potential customers, but any discussions are confidential."

Competing In The Skies

According to sources, Tata Group is likely to order Airbus A350-range jets, which can fly non-stop from New Delhi to USA's west coast area. The airline is fighting to revive itself. With good-quality services and advertisements in almost all Bollywood movies and actors, Air India still holds premium spots in many major airports like Indira Gandhi International (IGI) Airport Terminal-3, New Delhi. However, it is not out of the woods with foreign aviation companies posing competition with non-stop flights to India and flying through international hubs like the Middle East.

"This order presumably involves new methods of financing to play out in the right manner, including factoring in macroeconomic trends -- notably the fluctuating rupee and rising inflation," stated Satyendra Pandey, managing partner of aviation advisory firm AT-TV.

The Tata Group had taken over Air India this year in one of the highest privatisation ventures of public-owned companies. With four airline brands, Tatas will become a significant player in the aviation industry internationally and nationally. The deal for new jets can reduce costs with long-term maintenance and compete better in the commercial market.

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