Air India prepares one of the largest aircraft deals in history
Air India Ltd. is considering to order as many as 300 narrowbody jets, as per the people who are familiar with the matter, in what could be one of the largest orders in commercial aviation history as the formerly state-run airline looks to overhaul its fleet under new ownership.
It may order Airbus SE’s A320neo family jets or Boeing Co.’s 737 Max models, or a mix of both, the people said, asking not to be identified because the discussions are confidential. A deal for 300 737 Max-10 jets could be worth $40.5 billion at sticker prices, although discounts are very common in such large purchases.
Winning a narrowbody order in India would be a coup for Boeing, because the rival Airbus dominates the skies in the country, the world’s fastest-growing aviation market before the Covid pandemic. IndiGo, operated by InterGlobe Aviation Ltd., is the world’s largest customer for the European manufacturer’s best-selling narrowbodies, ordering more than 700, and others including Vistara, Go Airlines India Ltd. and AirAsia India Ltd. fly planes from the same family.
Production and delivery of 300 planes is estimated to take years or even more than a decade. Airbus builds about 50 narrowbody jets in a month, with plans to increase that to 65 by the middle of 2023, and 75 by 2025.
Representatives for Air India and Boeing have refused to comment. An Airbus representative said the company is always in contact with existing and potential customers, but the discussions are confidential.
“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,” said Satyendra Pandey, managing partner of aviation advisory firm AT-TV. “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.”