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Exclusive: Air India closes in on historic order for up to 500 jets

PARIS/NEW DELHI, Dec 11 (Reuters) – Air India is close to placing landmark orders for as many as 500 jets worth tens of billions of dollars from both Airbus and Boeing as it mounts an ambitious renaissance under the Tata Group conglomerate, industry sources said Sunday.

The orders include as many as 400 narrow-body and 1[ads1]00 or more wide-body jets, including dozens of Airbus A350s and Boeing 787s and 777s, they said, speaking on condition of anonymity as the final touches are put on the huge deal in the coming months the days. .

Such a deal could top $100 billion at list prices, including any options, and rank among the largest by a single airline by volume, eclipsing a combined order for 460 Airbus and Boeing jets from American Airlines more than a decade ago.

Even after significant expected discounts, the deal would be worth tens of billions of dollars and cap a volatile year for an industry whose jets are back in demand after the pandemic but faces mounting industrial and environmental pressures.

Airbus ( AIR.PA ) and Boeing declined to comment. Tata Group-owned Air India did not immediately respond to a request for comment.

The potential order comes days after Tata announced the merger of Air India with Vistara, a joint venture with Singapore Airlines, to create a larger full-service carrier and strengthen its presence in domestic and international skies.

This deal gives Tata a fleet of 218 aircraft, cementing Air India as the country’s largest international airline and second largest domestically after leader IndiGo ( INGL.NS )

Air India, with its maharajah mascot, was once known for its lavishly decorated planes and outstanding service, but its reputation declined in the mid-2000s as financial problems mounted.

Founded by JRD Tata in 1932, Air India was nationalized in 1953. Tata took back control in January and has since worked to revive its reputation as a world-class airline.

The planned order reflects a deliberate strategy to win back a solid share of traffic flows to and from India, which are currently dominated by foreign carriers such as Emirates.

Air India also wants to win a larger share of regional international traffic and the domestic market, setting up a battle on both fronts with IndiGo.

Delivered over at least a decade, the 500 jets would both replace and expand fleets in the world’s fastest-growing aviation market, while contributing to Prime Minister Narendra Modi’s goal of expanding the economy to $5 trillion.

But experts warn that many obstacles stand in the way of Air India’s ambition to restore a strong global position, including fragile domestic infrastructure, pilot shortages and the threat of tough competition from incumbent Gulf and other airlines.

Reporting by Tim Hepher, Aditi Shah; Editing by Jane Merriman

Our standards: Thomson Reuters Trust Principles.

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