Aviation: Tata-owned Air India may buy 300 new aircraft, for USD 40.5 billion
Virendra Pandit
New Delhi: Nearly six months after Air India returned to the Tata Group, the country’s premier airliner, currently busy overhauling the fleet under the new ownership, is considering buying around 300 new aircraft at an investment of USD 40.5 billion (Rs. 3,15,000 crore) in what is viewed as one of the largest deals in commercial aviation history.
These aircraft, according to the media reports, would be narrow-body jets like Airbus SE’s A320neo family jets, and/or Boeing Co’s 737 Max models
“A deal for 300 737 Max-10 jets could be worth USD 40.5 billion,” the reports said, adding Air India could also get a discount on bulk purchases.
Before the pandemic, India was the world’s fastest-growing aviation market, until 2019, and Airbus dominated the skies. If Boeing replaces Airbus’ dominance in the Indian commercial aviation market, it may change.
The Netherlands-based Airbus SE is a European multinational aerospace corporation that designs, manufactures, and sells civil and military aerospace products worldwide. It manufactures aircraft in Europe and other countries.
The Boeing Company, based in Arlington, Virginia, is an American multinational corporation that designs, manufactures, and markets airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and product support services.
In India, IndiGo, operated by InterGlobe Aviation Ltd., is the world’s largest customer for Airbus’ narrow bodies, having ordered over 700 aircraft. Other Indian airlines buying Airbus narrow bodies included Vistara, Go Airlines India Ltd., and AirAsia India Ltd.
After the Tatas-run Air India orders, production and delivery of 300 aircraft might take around a decade
The Tatas bought Air India this year in the most high-profile privatization under Prime Minister Narendra Modi’s NDA government.
In October 2021, the Tatas won the bid to buy Air India through their subsidiary, Talace Pvt Ltd, a unit of the holding company. They paid Rs.2,700 in cash and took over Rs.15,300 crore of the ailing Air India’s debt.
In January 2022, the government signed a share purchase agreement with Tata Sons for the sale of Air India for Rs.18,000 crore.
The Tata Group now owns three airlines. Besides Air India, it also owns Vistara with a 51 percent stake, and AirAsia India with an 84 percent stake. Together, the three airlines account for 24 percent of the market share in the aviation sector.
