Air India orders 470 planes from Boeing and Airbus in record deal

Airline announces orders for 250 Airbus planes and 220 Boeing aircraft, with options for 50 additional jets from US plane maker

Air India will buy 250 planes from Airbus in a deal aimed at expanding operations. AFP

Tata Group-owned Air India has placed an order for 470 Boeing and Airbus planes, marking the largest deal in commercial aviation history, in a move aimed at transforming the airline under its new owners.

The New Delhi-based flag carrier will buy 220 planes from Boeing and 250 from Airbus.

The first of the new aircraft will enter service in late-2023, with the bulk to arrive from mid-2025 onwards, Air India said in a statement on Tuesday. In the interim, the airline has already started taking delivery of 11 leased Boeing 777 and 25 A320 aircraft to accelerate its fleet and network expansion.

Air India has selected Boeing's family of fuel-efficient planes to expand its future fleet with 190 737 MAXs, 20 787 Dreamliners and 10 777X jets, the US plane maker said in a statement on Tuesday.

The agreement between Boeing and Air India also includes options for 50 additional 737 MAXs and 20 787-9s. When finalised, it will be the largest Boeing order in South Asia, Boeing said.

"These new planes will enable us to dramatically expand our network, both domestically and internationally, and will come with a completely new, world-class on-board product enabling passengers to travel in the highest levels of comfort and safety,” said Campbell Wilson, chief executive and managing director of Air India.

“This purchase will support over one million American jobs across 44 states, and many will not require a four-year college degree,” US President Joe Biden said in a statement issued by the White House.

“This announcement also reflects the strength of the US-India economic partnership. Together with Prime Minister [Narendra] 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.”

The deal will support “engineering and manufacturing jobs at Boeing factories in Washington state, South Carolina and across our supply base”, said Stan Deal, president and chief executive of Boeing Commercial Airplanes.

Earlier on Tuesday, Air India also signed a letter of intent to buy 210 A320 Neo-family jets and 40 A350 wide-body aircraft from European plane maker Airbus.

N Chandrasekaran, Tata Group chairman, announced the deal in an online briefing attended by Mr Modi and French President Emmanuel Macron.

“The A350’s unique capability will unlock the pent-up potential of India’s long-haul market, its technology, long reach and second to none comfort will enable new routes and passenger experience with better economics and enhanced sustainability," Christian Scherer, Airbus's chief commercial officer and head of International, said in a statement.

"Alongside the A350s, the A320 Family fleets will be the efficient, versatile asset to continue democratising and decarbonising air travel in the country — from domestic, regional, up to international levels.”

Calling the order a “landmark agreement”, Mr Modi said the "significant deal highlights not just the strong relations between India and France, but also India’s civil aviation sector’s success and ambitions”.

“India’s airports network has grown from 74 to 147 airports now. Statistics show that India will require more than 2,000 aircraft in the next few years. Today’s announcement will help support this growing demand,” he said.

Mr Modi also called on international aerospace companies to take the opportunities in India, which is set to become the civil aviation sector's third-biggest market globally.

Air India was privatised last year and has a fleet of about 100 aircraft, most of which are leased.

Tata Group formally took over Air India in January last year after the government's long-awaited privatisation of the debt-laden and loss-making airline in a 180 billion rupee deal ($2.2 billion) for 100 per cent ownership.

The Airbus order will equip Air India with fuel-efficient, modern aircraft, positioning the airline to better compete with local low-cost carriers and well-established rivals in the Middle East, according to aviation analysts.

“Air India's landmark order with Airbus clearly signifies the airline's future focus, which will be operating an airline with a network that goes further, faster and longer,” Mark Martin, chief executive of aviation consultancy Martin Consulting, said.

Air India's introduction of the Airbus A350 wide-body aircraft into its fleet will help the airline operate with improved efficiency, reliability, 35 per cent lower operating cost and more than 28 per cent reduction in carbon emissions, he said.

The order will also help the carrier to offer service directly from India, bypassing other regional centres, Mr Martin said.

The new aircraft, if equipped with the latest in-flight products and amenities, would enable Air India to compete with best-in-class airlines, said Vinamara Longani, head of operations at Sarin & Co, an Indian law firm specialising in aircraft leasing and finance.

“This historic decision by Air India to acquire 250 Airbus aircraft will be key for the airline to once again position itself as a preferred premium full-service airline,” Mr Longani said.

Airbus and Rolls-Royce have signed a multibillion pound deal to make planes for Air India in a partnership hailed by UK's Prime Minister Rishi Sunak as a major boost for British manufacturing.

A significant portion of building the aircraft is expected to take place in the UK, supporting and creating high-skill jobs in Wales and Derbyshire, England.

After being manufactured in Gloucestershire, the wings of the A350 aircraft will be assembled in Flintshire, Wales. The project is tipped to bring an additional 450 manufacturing jobs and more than £100 million of investment to Wales.

The planes, which are typically designed to seat 300 to 410 passengers, are powered by Rolls-Royce XWB engines, which are assembled and tested in Derby.

“This landmark deal between Air India, Airbus and Rolls-Royce demonstrates that the sky’s the limit for the UK’s thriving aerospace sector,” Mr Sunak said.

“It will create better-paid jobs and new opportunities in manufacturing hubs from Derby to Wales, so we can grow the economy and support our agenda to level up, helping to deliver on my five priorities for the country.”

“The UK is already a top investment destination, and by building trade ties with growing economic powers like India we will ensure UK businesses remain at the forefront of global growth and innovation,” he added.

Kemi Badenoch also welcomed the deal after being appointed to oversee the government’s new Department for Business and Trade in last week’s cabinet reshuffle.

Ms Badenoch, who previously oversaw trade only, said the pact between Airbus, Rolls-Royce and Air India marks “a significant win for the UK's world-leading aerospace sector”.

“It’s a shot in the arm for UK exports as we aim to sell £1 trillion of goods and services a year to the world by the end of the decade,” the business and trade secretary said.

“We’re currently negotiating a trade deal with India which could boost trade by up to £28 billion a year by 2035. Export wins like this are another big step to our nations forming a closer trading relationship.”