Air India Signs Largest Shopping Event in Commercial Aviation History, to Acquire 470 Passenger Aircrafts

Manas Dasgupta

NEW DELHI, Feb 14: Tata group’s Air India on Tuesday announced purchasing of 250 Airbus passenger aircrafts and finalised another deal of acquiring 220 aircrafts from Boeing for its domestic and international routes in the largest shopping event in commercial aviation history.

The company has signed multi-billion dollar deals with France’s Airbus and American plane-maker Boeing to buy 470 passenger aircraft. The airline, which Tata group bought from the government in October 2021, will buy 250 aircraft from Airbus and 220 from Boeing. “I am proud to announce today the purchase of over 200 American-made aircraft through a historic agreement between Air India and Boeing. 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 on Tuesday.

There is an option for Air India to buy 70 more aircraft from Boeing, taking the total deal value to $45.9 billion. Tata group’s 250-plane deal with Airbus is for 40 A350 wide-body long-range aircraft and 210 narrow-body ones, believed to be variants of the A320neo family of jetliners. This deal will cost over $100 billion. The wide-body aircrafts will be used for ultra-long flights.

“It is a historic moment for Airbus to help script Air India’s revival,” Airbus chief executive Guillaume Faury said in a video conference with Prime Minister Narendra Modi, Ratan Tata, French President Emmanuel Macron and other leaders. “This contract is a milestone in the friendly relations between India and France,” said Mr Macron at the conference, where Union Ministers Piyush Goyal and Jyotiraditya Scindia and Tata Sons chairman N Chandrasekaran also participated.

The A350 family has two versions – the A350-900, and the longer fuselage A350-1000. Airbus says A350s fly efficiently on any sector from short-haul to ultra-long-haul routes up to 17,000 km, carrying 300 to 410 passengers in typical three-class configurations, and up to 480 passengers in a single-class layout. Airbus’ narrow-body aircraft include the A320 and A220 family of planes. Many airlines in India already fly the A320 family.

Air India is also likely to revamp its livery. Last month, it committed $400 million to refurbish the interiors of its entire wide-body fleet. Air India said these will incorporate the “latest generation seats and best-in-class inflight entertainment systems.”

“This important deal shows, along with the deepening of relations between India and France, the successes and aspirations of the civil aviation sector in India. Today, civil aviation is an integral part of India’s growth,” Modi said.

Air India’s deal with Airbus and Boeing was the first in more than 17 years. It is also the first order placed by the carrier under the ownership of Tata Group which finally acquired Air India in January, last year. Air India, earlier under the ownership of the government, had acquired new aircraft more than 17 years ago.

The airline’s last order was for 111 planes — 68 from Boeing and 43 from Airbus — and that deal was worth $10.8 billion. The order was placed in 2005. On January 27, when the Tata Group completed the first year of taking over Air India, the airline said it was “finalising a historic order of new aircraft to power future growth.

The airline has put in place a roadmap under Vihaan.AI for transformation over the next five years and has taken various measures, including committing $400 million to refurbish the interiors of its entire wide-body fleet.

Modi hailed the deal between Air India and Airbus and said India’s growing aviation sector would need over 2,000 aircraft in the next 15 years. “Our civil aviation sector is an integral part of India’s development. Strengthening the civil aviation sector is an important aspect of our national infrastructure policy,” he said. In the last eight years, the number of airports has gone up from 74 to 147, Modi pointed out.

Through the scheme UDAN, remote parts of the country are also being connected through air connectivity, which is giving a boost to the economic and social development of the people, he said. In the near future, India would become the third biggest market in the world in the aviation sector, he said.

“Whether it is the issue of security and stability in the Indo-Pacific region, or global food security and health security, India and France together are making a positive contribution,” Mr. Modi said in his remarks. “Today, the India-France partnership is playing a key role in ensuring stability and balance of the international order and the multilateral system,” he said.

Chandrasekaran said Airbus and Tata were working on bigger partnerships, including an ambition “to bring in commercial aircraft manufacturing at some point in time in the future”.

Air India’s order is expected to top American Airlines’ combined deal for 460 Airbus and Boeing planes more than a decade ago – making it the single largest deal by an airline. Air India remains India’s largest international carrier, but its domestic market share stood at only 8.6 per cent in September.

The carrier is aiming to take a 30 per cent domestic share by the end of 2027 while expanding its fleet to cover more international routes.