Air India To Make One Of The Largest Aircraft Deals In Commercial Aviation History

300 Narrowbody jets ordered so far!

Air India Ltd. is ordering as many as 300 narrowbody jets, 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.

The carrier 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 highly confidential. A deal for 300 737 Max-10 jets could be worth $40.5 billion at sticker prices, although discounts are common in such large deals.

Winning a narrowbody order in India would be a coup for Boeing, as rival Airbus dominates the skies in the country which was the world's fastest-growing aviation market before the 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 the planes would likely 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 declined to make any such comment. An Airbus representative said the company is always in contact with existing and potential customers, but all the discussions are confidential.

"This order presumably involves new methods of financing to play out in a different manner, including factoring in macroeconomic trends, notably the fluctuating rupee and rising inflation," said Satyendra Pandey, managing partner of aviation advisory firm AT-TV.

Air India's owner Tata Group is also close to an order for Airbus A350 long-range jets that are 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 advertisements featuring Bollywood stars, the airline still has lucrative landing slots at most of the major airports, but it faces competition from foreign airlines with nonstop services to India.

Tata bought the airline earlier this year in the most high-profile privatization under PM Modi. It is expected to consolidate its aviation businesses, including four airline top brands. An order for new planes, especially with terms on long-term maintenance, would help it cut costs and compete better with rivals offering very cheap fares.