Air India Limited is considering ordering up to 300 narrow-body planes, according to people familiar with the matter, in what could be one of the largest orders in commercial aviation history as the former state-run airline looks to overhaul its fleet under new ownership.
The people, who asked not to be identified, said the company could order Airbus SE’s A320neo family or Boeing Co 737 Max models, or a combination of both, as they asked not to be identified because discussions are confidential. A deal to buy the 300737 Max-10 could be worth $40.5 billion at sticker prices, although discounts are common on such large purchases.
Winning a narrow-band order in India would be a coup for Boeing, as rival Airbus dominates the country’s skies, the world’s fastest-growing aviation market before the Covid pandemic. IndiGo, operated by InterGlobe Aviation Ltd. , is the world’s largest customer for the European manufacturer’s best-selling narrow-body products, ordering more than 700, and others including Vistara and Go Airlines India Ltd. and AirAsia India Ltd.
Production and delivery of 300 aircraft will likely take years or even more than a decade. Airbus is making about 50 narrow-body aircraft in one month, with plans to increase that to 65 by mid-2023, and 75 by 2025.
Representatives of Air India and Boeing declined to comment. An Airbus representative said the company is in constant contact with current and potential customers, but that any discussions will be confidential.
“This should involve new avenues of financing to play the right way, including taking into account macroeconomic trends – particularly the volatile rupee and rising inflation,” said Satyendra Pandey, managing partner of aviation consultancy AT-TV. “Some airlines have placed huge orders only to find that they are unable to arrange financing on favorable terms. While it is not an outcome one would envision and certainly not with a group like Tatas, it should be planned.”
Bloomberg News reported this month that Air India’s owner, Tata Group, has also approached an order for long-range Airbus A350 jets capable of flying to the west coast of the United States from New Delhi. The company was once best known for its premium services and advertising featuring Bollywood stars, and it still has lucrative outlets to land at most major airports, but it faces competition from foreign airlines that provide nonstop services to India, as well as airlines that fly through hubs in the Middle East.
Tata bought the airline earlier this year in a landmark privatization process under Prime Minister Narendra Modi. It is expected to strengthen its aviation business, including four airline brands. Ordering new aircraft, especially on favorable terms for long-term maintenance, would help it cut costs and better compete with competitors who offer very cheap prices.
(This story has not been edited by the NDTV crew and is automatically generated from a shared feed.)
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