Air India on Friday will finally seal half of an order worth billions of dollars for some 495 jets with Boeing and engine suppliers General Electric and CFM International, quoting two industry sources news agency Reuters reported. Tata Group, the new owner of Air India, seeks to revive the airline and compete with much larger rivals, according to the Reuters report.
Air India, after months of closely-guarded, tough negotiations, is set to place an order for 190 Boeing 737 MAX narrow-body aircraft as well as some 20 Boeing 787s and 10 Boeing 777X planes on a day marking one year since Tata Group took control of the former state-run carrier, the sources told Reuters.
The second half of the order, which industry sources have told Reuters includes around 235 Airbus single-aisle jets and about 40 Airbus A350 wide-body planes, is expected to be formally wrapped up over the coming days.
Senior Boeing, GE and CFM officials are expected in India to mark the deal on Friday.
Despite earlier expectations of a single coordinated announcement, it remains unclear when either deal may be publicly disclosed especially with the Aero India air show looming in February when deals like this are usually revealed.
Boeing and Airbus, as well as CFM's joint venture partners GE and Safran declined comment. Air India did not respond to a request for comment. Reuters reported last month Air India was closing in on a deal for about 500 jets. The order, once finalised, aims to put Air India in the league of large global airlines and make it an influential customer for planemakers and suppliers at a time when its home market is seeing a strong post-Covid travel surge.
Domestic passenger air traffic in India grew 47 per cent in 2022 from a year ago, government data showed.
Analysts caution the airline faces intense competition given the connectivity carved out by local and international rivals.
India has a large, under-served air travel market dominated by budget carrier IndiGo. The bulk of India's outbound passenger traffic, however, is carried by Middle Eastern airlines like Emirates and Qatar Airways.
Under its new owners Air India is looking to restore its reputation at home and overseas as a storied carrier with impeccable service and world-class planes. It has put back in service nearly 20 aircraft that had been grounded for years due to lack of parts and money. The airline has also said it will spend over $400 million to refurbish its entire legacy wide body fleet of 27 Boeing 787-8s and 13 777 aircraft.
Air India CEO Campbell Wilson earlier said that the aim is to corner 30 per cent of the domestic air travel market over the next five years thus narrowing the gap with market leader IndiGo. Air India also wants to increase by "multiples" its current share of international travel, Wilson added.