Tata-owned Air India to place historic order of at least 500 jets: Here’s all you need to know
Air India is close to placing a historic order for as many as 500 jetliners worth tens of billions of dollars from Airbus and Boeing, said a report by Reuters citing sources. This comes months after the Tata Group conglomerate officially took over the airline from the Indian government following an Rs 18,000 crore ($180 billion) deal.
Tata Group recently also announced the merger of Air India with Vistara, its joint venture with Singapore Airlines, thereby creating a significant presence in the domestic and international markets.
Why is this deal so important?
The report citing anonymous industry sources claims that the order includes at least 400 narrow-body jets and 100 or more wide-bodies jets like several Airbus A350s and Boeing 787s and 777s. If the deal is inked, it would be among some of the biggest purchases by a single airline in terms of volume, surpassing the combined order of over 460 Airbus and Boeing jets from American Airlines placed over a decade ago.
However, despite significant expected discounts, it could still cost the company over $100 billion dollars, at list prices. This comes as the plane giants have faced an increase in demand following the ease of COVID-19 pandemic restrictions amid mounting industrial and environmental pressures.
These would also allow Airbus to utilise production slots for their A350s which had been initiated for Russia's Aeroflot and have been vacant since the Russian invasion of Ukraine and subsequent western sanctions on Moscow.
The merger of Air India with Vistara as well as the Singapore Airlines joint venture gives the conglomerate access to over 200 additional aircraft, making it India’s largest international carrier and the second largest in the domestic market.
If the deal is inked, the purchase could take at least a decade to be delivered, in addition to the Vistara deal. The potential procurement seems to be an indication of the Tata group’s expansion to take over a significant share of traffic flows to and from India which is currently dominated by foreign airlines like Emirates. In the domestic market, Indigo is one of the other biggest players.