Air India likely to add over 300 narrow-body planes; Here's what we know
The airline may acquire Airbus SE's A320neo family jets, Boeing Co.'s 737 Max models, or a mix of both, as per reports.
FollowAir India Ltd. is considering acquiring as many as 300 narrow-body planes, according to persons familiar with the situation, which would be one of the largest purchases in commercial aviation history as the once state-run airline prepares to modernise its fleet under new ownership.
The airline may acquire Airbus SE's A320neo family jets, Boeing Co.'s 737 Max models, or a combination of both, as per sources who asked not to be identified because the talks are private. A deal for 300 Boeing 737 Max-10 jets at sticker pricing may be worth $40.5 billion, though discounts are customary in such huge orders.
Winning a narrowbody order in India would be an achievement for Boeing, as rival Airbus controls the skies in the country, formerly the world's fastest-growing aviation market. IndiGo, a subsidiary of InterGlobe Aviation Ltd., is the world's largest client for the European manufacturer's best-selling narrowbodies, having ordered over 700. At the same time, Vistara, Go Airlines India Ltd., and AirAsia India Ltd. also operate planes from the same family.
Production and delivery of 300 planes would most likely take years, if not a decade. Airbus produces approximately 50 narrowbody jets per month, with plans to increase that number to 65 by the middle of 2023 and 75 by 2025.
It would take years, if not a decade, to manufacture and deliver 300 planes. Airbus now produces roughly 50 narrowbody planes per month, with plans to raise production to 65 by the middle of 2023 and 75 by 2025.
Air India and Boeing representatives were unavailable for comment. According to an Airbus official, the corporation is in constant contact with current and potential customers, but any discussions are private.
"This order entails new financing methods, including factoring in macroeconomic developments, such as the fluctuating rupee and rising inflation," said Satyendra Pandey, managing partner of aviation advisory firm AT-TV. "Some airlines have placed large orders only to discover that they cannot secure appropriate financing. While it is unlikely to happen, especially with a family like the Tatas, it must be anticipated."
According to Bloomberg News, Air India's owner Tata Group is close to placing an order for Airbus A350 long-range jets capable of travelling as far as the US West Coast from New Delhi. The airline, formerly famed for its premium services and commercials featuring Bollywood stars, still has lucrative landing slots at most major airports, but it confronts competition from foreign airlines carriers that fly nonstop to India and carriers that fly via Middle Eastern hubs.
In the most high-profile privatisation under Prime Minister Narendra Modi, Tata bought the airline earlier this year. It plans to merge its aviation divisions, which include four airline brands. A new jet order, especially one with good long-term maintenance terms, would help it decrease expenses and compete better with competitors who offer extremely low tickets.
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