Air India places orders for 470 planes with Airbus, Boeing; deals estimated to be worth USD 80 bn

In one of the largest aircraft orders by an airline, Tata Group-owned Air India on Tuesday announced it will buy 470 narrow-body and wide-body planes from Airbus and Boeing, with the total deal value estimated to be worth USD 80 billion (over Rs 6.40 lakh crore).

Air India will buy 250 aircraft, including 40 wide-body A350 planes, from European aviation major Airbus, and 220 planes from US aircraft maker Boeing under separate deals.

Prime Minister Narendra Modi described Air India-Airbus transaction as a "landmark deal" that also reflects the deepening ties between India and France. The prime minister along with US President Joe Biden also welcomed the landmark agreement between Air India and Boeing as a shining example of mutually beneficial cooperation.

This is also the first time in more than 17 years that Air India, which was acquired from the government by Tata Group in January 2022, has ordered planes. The first A350 plane will be delivered to the airline by the end of this year.

"The order comprises 40 Airbus A350s, 20 Boeing 787s and 10 Boeing 777-9s wide-body aircraft, as well as 210 Airbus A320/321 Neos and 190 Boeing 737 MAX single-aisle aircraft. The A350 aircraft will be powered by Rolls-Royce engines, and the B777/787s by engines from GE Aerospace. All single-aisle aircraft will be powered by engines from CFM International," Air India said in a statement.

The airline has signed Letters of Intent with Airbus and Boeing.

Sources said the deals are estimated to be worth around USD 80 billion (about Rs 6.4 lakh crore).

According to Air India, the first of the new aircraft will enter service in late 2023 and the bulk of the planes are to arrive from mid-2025 onwards. A350 will be utilised for ultra-long haul.

In a message to Air India staff, CEO Campbell Wilson said that in addition to the 470 aircraft on firm order, the airline has secured a number of options and purchase rights.

"The firm part of the order alone is not just the largest order ever made by an Indian airline, it is one of the largest single aircraft orders by any airline, anywhere, ever, and testifies to India's unique combination of extraordinary scale and growth opportunity," he said.

Tata Sons and Air India Chairman N Chandrasekaran said the orders are 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".

The announcement of the aircraft purchase deal with Airbus was made at an online event that was attended by Modi, French President Emmanuel Macron, Union ministers Jyotiraditya Scindia and Piyush Goyal, Tata Sons Chairman N Chandrasekaran, Tata Group patriarch Ratan Tata, Air India CEO Campbell Wilson and Airbus CEO Guillaume Faury.

Macron said Air India's deal with Airbus for the acquisition of 250 aircraft was one of the milestones of the in-depth strategic and friendly partnership between India and France.

Meanwhile, in an announcement, the White House said Boeing and Air India have reached an agreement under which the airline will purchase 220 planes from Boeing -- 190 B737 MAX, 20 B787, and 10 B777X -- for USD 34 billion.

There will be an option to buy 70 more aircraft that could take the total transaction value to USD 45.9 billion.

Modi and President Biden welcomed the announcement of the landmark agreement between Air India and Boeing as a "shining example of mutually beneficial cooperation that will help create new employment opportunities in both countries", according to a statement issued by the Prime Minister's Office (PMO).

On Tuesday, British Prime Minister Rishi Sunak hailed a multi-billion-pound deal by Airbus and Rolls-Royce to supply new aircraft to Air India as a landmark moment for the country's aerospace sector and reiterated his commitment to continue building ties with India.

Airbus India head Remi Maillard said the company will deliver the first A350 aircraft to Air India by the end of this year and that the deal with the airline also marks the European aviation major's "emphatic return" to the wide-body segment in India, which is the fastest growing aviation market.

In a tweet, Civil Aviation Minister Jyotiraditya Scindia said the historic agreement between Air India and Airbus is a testimony to the growing importance of civil aviation.

Air India, earlier under the ownership of the government, had acquired new aircraft more than 17 years ago.

The airline's last order was for 111 planes -- 68 from Boeing and 43 from Airbus -- and that deal was worth USD 10.8 billion. The order was placed in 2005.

In India currently, around 470 commercial aircraft of Airbus are in service and the European major's order book for Indian airlines is around 850 planes. Indian carriers operate around 159 Boeing planes.