Air India Close To Placing Historic Order Of 500 Jets: Report

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.

Representational Image. (Source: File Photo)

Air India is close to placing landmark contracts for up to 500 jetliners worth tens of billions of dollars from both Airbus and Boeing as it carves out an ambitious revival under the Tata Group conglomerate, as per industry sources, news agency Reuters reported.

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 added, speaking on condition of anonymity as the massive transaction nears completion.

Such a contract might reach $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 planes over a decade ago.

Even with considerable projected discounts, the transaction would be worth tens of billions of dollars and would cap a turbulent year for a sector whose planes are back in demand following the epidemic but is facing rising industrial and environmental challenges.

Airbus and Boeing both declined to comment. Air India, which is owned by the Tata Group, did not immediately reply to a request for comment.

The possible order comes just days after Tata announced the merger of Air India and Vistara, a joint venture with Singapore Airlines, in order to establish a larger full-service carrier with a stronger footprint in both local and international skies.

This agreement provides Tata a fleet of 218 aircraft, establishing Air India as the country's largest international carrier and the country's second largest domestic carrier behind IndiGo.

Air India, with its maharajah mascot, was formerly recognised for its beautifully adorned planes and excellent service, but its image began to deteriorate in the mid-2000s as financial difficulties increased.

JRD Tata founded Air India in 1932, and it was nationalised in 1953. Tata seized control in January and has since worked to restore the airline's status as a world-class carrier.

The anticipated order is part of a concerted campaign to reclaim a significant portion of traffic flows to and from India, which are now controlled by foreign carriers such as Emirates.

Air India also seeks to increase its share of regional foreign traffic as well as the local market, setting up a competition with IndiGo on two fronts.

The 500 planes would be delivered over at least a decade, replacing and increasing fleets in the world's fastest-growing airline sector, while also contributing to Prime Minister Narendra Modi's objective of boosting the economy to $5 trillion.

However, analysts warn that several obstacles, including poor local infrastructure, pilot shortages, and the danger of severe competition with established Gulf and other airlines, lie in the way of Air India's goal to reclaim a major worldwide position.

(With Inputs From Reuters)