Air India Ltd. is considering ordering as many as 300 narrow-body aircraft, according to people familiar with the matter, in what may be one of the largest orders in commercial aviation history as the former state-run airline appears to be overhauling its fleet under new ownership.
The airline can order Airbus SE̵[ads1]7;s A320neo family jets or Boeing Co.’s 737 Max models, or a mixture 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, though discounts are common on such large purchases.
Winning a narrowbody order in India would be a coup for Boeing, as 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 narrow bodies, ordering more than 700, and others, including Vistara, Go Airlines India Ltd. and AirAsia India Ltd. flying planes from the same family.
The production and delivery of 300 aircraft will probably take years or even more than a decade. Airbus builds around 50 narrow-body aircraft in one month, with plans to increase it to 65 by mid-2023, and 75 by 2025.
Representatives of Air India and Boeing declined to comment. An Airbus representative said that the company is always in contact with existing and potential customers, but all discussions are confidential.
“This order presumably involves new methods of financing to play out properly, including taking into account macroeconomic trends – especially fluctuating rupees and rising inflation,” said Satyendra Pandey, managing partner of aviation consultancy AT-TV. “Some airlines have placed large orders only to discover that they are not able to set up financing on favorable terms. Although it is not an outcome one envisages and certainly not with a group like Tatas, it still has to planned. “
Air India’s owner Tata Group is also close to ordering an Airbus A350 long-haul aircraft capable of flying as far as the US west coast from New Delhi, Bloomberg News reported this month. Once known for its premium services and ads with Bollywood stars, the airline still has lucrative landing sites at most major airports, but it faces competition from foreign airlines with direct services to India, as well as airlines flying via hubs in the Middle East.
Tata bought the airline earlier this year in the most high-profile privatization under Prime Minister Narendra Modi. It is expected to consolidate its aviation operations, including four airline brands. An order for new aircraft, especially with favorable terms for long-term maintenance, will help it cut costs and compete better with rivals that offer very cheap prices.
(This story has not been edited by NDTV staff and is automatically generated from a syndicated feed.)