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Air India Is On The Verge Of Placing A Historic Order For Up To 500 Jets

Air India Is On The Verge Of Placing A Historic Order For Up To 500 Jets
According to industry sources, Air India is close to placing landmark orders for up to 500 jetliners worth tens of billions of dollars from both Airbus and Boeing as it carves out an ambitious renaissance under the Tata Group conglomerate.
The orders include up to 400 narrow-body planes and 100 or more wide-body planes, including dozens of Airbus A350s and Boeing 787s and 777s, they said, speaking on condition of anonymity as the massive deal nears completion.
Such a deal could top $100 billion at list prices, including any options, and rank among the largest by a single airline in terms of volume, dwarfing American Airlines' combined order for 460 Airbus and Boeing jets over a decade ago.
Even after significant expected discounts, the deal would be worth tens of billions of dollars and would cap a turbulent year for plane giants whose jets are once again in demand following the pandemic, but who are also facing mounting industrial and environmental pressures.
It would also allow Airbus to secure a home for some A350 production slots that were originally earmarked for Russia's Aeroflot but are now available due to war-related sanctions imposed on Moscow.
There were no comments from Airbus, Boeing, and Tata Group-owned Air India on the issue.
China delivered its first C919 jetliner last week, but experts believe it is at least a decade away from competing on such a large scale.
The potential mega-order comes just days after Tata announced the merger of Air India and Vistara, a joint venture with Singapore Airlines, to create a larger full-service carrier with a stronger presence in domestic and international skies.
This agreement gives Tata a fleet of 218 aircraft, establishing Air India as the country's largest international carrier and the country's second largest domestic carrier after IndiGo.
Purchasing debt-ridden Air India provided Tata with valuable flying rights and landing slots, particularly to destinations in the United States and Europe.
The maharajah mascot of Air India was once synonymous with lavishly decorated planes and stellar service, but its reputation deteriorated in the mid-2000s as financial difficulties mounted.
JRD Tata founded Air India in 1932, and it was nationalized in 1953. Tata regained control in January and has since worked to restore the airline's reputation as a world-class carrier.
The order reflects a strategy to reclaim a significant share of trips between India's large overseas diaspora and cities such as Delhi and Mumbai, which are currently dominated by foreign competitors such as Emirates.
Air India also wants to increase its share of regional international traffic as well as the domestic market, setting up a battle with IndiGo on both fronts.
The 500 jets, which will be delivered over the next decade, will replace and expand fleets in the world's fastest-growing air travel market, while also contributing to Prime Minister Narendra Modi's goal of expanding the economy to $5 trillion.
However, experts warn that many obstacles, including frail domestic infrastructure, pilot shortages, and the threat of tough competition with established Gulf and other carriers, stand in the way of Air India's ambition to reclaim a strong global position.
It may also face delays in receiving the medium-haul Airbus A321neos ordered for the Air India-Vistara alliance, as the European planemaker is sold out until 2028 or later.
According to one industry source, new Boeing 737 MAXs will most likely be delivered to Air India Express, the company's low-cost carrier, which may be renamed.
Insiders say plane and engine manufacturers have been pounding on Air India's door for months, with new CEO Campbell Wilson refusing to rush the fleet decision.
According to Reuters, Air India is spending more time studying Airbus A350s and Boeing wide-body 787 and 777 models, in addition to a possible mixed order for smaller single-aisle jets.
Campbell confirmed last month that talks are underway to "greatly expand" Air India's fleet over the next five years, adding, "At the risk of gross understatement, the investment will be substantial."

Christopher J. Mitchell

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