Mumbai, India (CU)_ According to close sources familiar with the subject, Air India Ltd. is planning to purchase a total of 300 narrowbody planes, which would be one of the biggest purchases in commercial aviation history as the former state-owned airline seeks to revamp its fleet under new ownership. The close sources reported that the airline may purchase Airbus SE’s A320neo family of planes, Boeing Co.’s 737 Max models, or a combination of both, requesting anonymity due to the sensitive nature of the negotiations. A contract for 300 737 Max-10 planes might cost around $40.5 billion at list price, but such huge orders may have large discounts as well.
Bagging a narrowbody purchase order from India would be a victory for Boeing, as Airbus controls the skies in India, the fastest growing aviation market in the world prior to the Covid outbreak. IndiGo, which is operated by InterGlobe Aviation Ltd., is the top client in the world for the European manufacturer’s best-selling narrowbodies, having ordered more than 700. Vistara, Go Airlines India Ltd., and AirAsia India Ltd. also operate aircraft from the same family.
Manufacturing and delivering 300 aircraft might take years, or possibly over a decade. Airbus generally manufactures 50 narrowbody planes a month. However, the company intends to raise its monthly production of narrowbody planes to 65 by the middle of 2023 and to 75 by 2025. Air India and Boeing representatives refused to disclose further details. A spokeswoman from Airbus stated that the corporation is always in touch with its existing and future clients, but all conversations remain secret.
Satyendra Pandey, managing partner of aviation advisory firm AT-TV, stated, “This order presumably involves new methods of financing to play out in the right manner, including factoring in macroeconomic trends — notably the fluctuating rupee and rising inflation”. He added, “Some airlines have placed voluminous orders only to find that they are unable to line up financing at favorable terms. While it is not an outcome that one envisions and certainly not with a group such as the Tatas, nevertheless it has to be planned for.”
According to recent media reports, Tata Group, Air India’s owner, is close to placing an order for Airbus A350 long-range planes capable of traveling from New Delhi to the West Coast of the United States. Once popular for its luxury services and commercials featuring Bollywood actors, the popular airline still has profitable landing slots at major airports in the world. However, it faces competition from international airlines with nonstop connections to India and Middle Eastern flights that fly via hubs.
In the beginning of the year, Tata purchased the airline in the most prominent privatization under Prime Minister Narendra Modi. It is anticipated to combine its aviation activities, comprising four airline brands. A purchase of new aircraft, particularly with advantageous maintenance conditions over the long run, would help the airline reduce expenses and compete more effectively with airlines that offer extremely low tickets.
