Ending months of speculation, Tata Group-owned Air India has announced the world’s largest order for passenger aircraft from France’s Airbus and US’ Boeing.
The deal, totalling 470 aircraft, comprises new and next-generation 40 Airbus 350, 20 Boeing 787, 10 Boeing 777-9s, 210 Airbus A320/321 Neo and 190 Boeing 737 MAX single-aisle aircraft.
This is also the first major aircraft order announced by a global carrier as the global aviation industry recovers from the slowdown induced by the Covid-19 pandemic and geopolitical turbulence following the Russian military action in Ukraine. The Airbus 350 and Boeing 777-9s belong to the widebody category and will likely be deployed on ultra-long-haul routes to serve destinations in the US and Australia.
While declining to put a number on the total cost of the deal, sources told Business Today the planes had been acquired at a substantial discount from the sticker price following months of hard negotiations with Airbus and Boeing.
“Geopolitics also played a role in the order as the European and American governments realised that India was fast-emerging as the new growth centre to rival China,” a person familiar with negotiations said.
Aggressive pricing and backroom diplomacy involving Paris and Washington were witnessed in the final countdown to the deal being inked, sources told BT.
Significant global expansion
In a media statement, chairman of Tata Sons and Air India, N Chandrasekaran stated, “This order is an important step in realising Air India’s ambition, articulated in its Vihaan.AI transformation programme, to offer a world-class proposition serving global travellers with an Indian heart. These new aircraft will modernise the Airline’s fleet and onboard product, and dramatically expand its global network.”
Air India is expected to receive the first of the new aircraft by this year's end, with a substantial part of the deliveries to start arriving from mid-2025 onwards.
Another interesting aspect of the deal is regarding the engines powering the aircraft. While the A350 aircraft will come fitted with engines from UK’s Rolls Royce, the B777/787s will utilise engines from the US-based GE Aerospace and all single-aisle aircraft will be equipped with CFM engines, a 50:50 partnership between Safran Aircraft engines and GE Aviation.
Launched in 1932 by the legendary chairman of the Tata group JRD Tata, an aviation buff and a certified pilot, the company was nationalised by the Indian government in 1953, though Tata was retained on the Air India board till his removal by the Morarji Desai led Janta Party government in February 1978.
In January 2022, Air India returned to the Tata fold in what was described by several commentators and analysts as a watershed moment in the government's plans to divest its stake in publicly held companies.