As part of a massive deal for 470 planes, Air India has agreed to buy 250 jets from Airbus. This is a long-awaited change under its new owners, the Tata Group.
The contract includes 210 narrow-body planes and 40 wide-body jets, which Air India would use to fly "ultra-long routes across the globe," according to Tata Chairman N Chandrasekaran.
The agreement is also expected to include a Boeing order for 220 planes, which will compete with Airbus, according to Nikkei Asia.
Samchui.com tells us that the purchase includes 34 A350-1000 and six A350-900 wide-body aircraft in addition to 140 A320neo and 70 A321neo single-aisle aircraft.
A Turning Point for Air India
"We are committed to building a world-class airline... one of the most critical elements is a modern fleet that is efficient and can perform for all routes," Chandrasekaran said at a virtual press conference attended by Indian Prime Minister Narendra Modi and French President Emmanuel Macron.
In a report, Reuters cites that Air India, which has a mascot of a maharajah, was once known for its luxurious jets and excellent service. Still, its reputation worsened in the middle of the 2000s as its financial issues deepened.
The record order is meant to put Air India in the same league as the world's biggest airlines and make it a key customer for aircraft manufacturers and suppliers at a time when Air India's market is seeing a big travel surge after COVID-19.
Industry sources say India has been lobbying Airbus to build a final assembly line in the country to rival a plant in northern China, but the planemaker has declined on financial and industrial considerations.
Sources say the contract is worth approximately $37 billion based on the available market value for the most popular variant of the planes, even though airlines typically obtain huge discounts on such mega deals.
The Future of Air India
The aviation deal is anticipated to have additional economic spin-offs, as Macron has pledged that France will partner with India on other projects besides aircraft.
During the video presentation, Macron was quoted as saying, "This accomplishment shows that Airbus and all its French partners are fully dedicated to developing new areas of dedication with India."
Meanwhile, Chandrasekaran stated that Airbus and Tata were working on broader relationships, including the aspiration "to bring in commercial aircraft manufacturing at some point in the future."
A Strong Political Message
"It is essential for the industry because, given the recent turbulence in the China market, the alternative growth market is India," said independent aviation adviser Bertrand Grabowski, as quoted by Nikkei Asia.
Grabowski pointed out that India is also sending a strong political message that it wants to stay close to the West at a time when Russian sanctions are not clear.
The purchase is expected to outnumber American Airlines' combined contract for 460 Airbus and Boeing jets more than a decade ago, making it the single largest deal ever made by an airline. This deal is a huge step forward for the Tata Group's Air India, Indian aviation, and India's industrial industry.
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