Sat. Oct 1st, 2022

According to persons familiar with the situation, Air India Ltd. is considering acquiring up to 300 narrowbody planes, which might be one of the biggest purchases in commercial aviation history, as the once state-run airline prepares to revamp its fleet under new ownership.

The airline may acquire Airbus SE’s A320neo family planes or Boeing Co.’s 737 Max models, or a combination of the two, according to individuals who asked not to be identified because the conversations are private. At sticker pricing, a contract for 300 737 Max-10 planes may be worth $40.5 billion, though reductions are customary in such huge orders.

Winning a narrowbody order in India would be a major accomplishment for Boeing, since competitor Airbus controls the skies in the nation, which was the world’s fastest-growing aviation market prior to the Covid outbreak. IndiGo, operated by InterGlobe Aviation Ltd., is the world’s largest client for the European manufacturer’s best-selling narrowbodies, having ordered over 700, while other airlines in the same family include Vistara, Go Airlines India Ltd., and AirAsia India Ltd.
Production and delivery of 300 planes would most certainly take years, if not a decade. Airbus produces around 50 narrowbody planes each month, with plans to boost that to 65 by the middle of 2023 and 75 by 2025.

Air India and Boeing representatives declined to comment. According to an Airbus official, the corporation is always in communication with current and future clients, but any talks are strictly secret.

“This order obviously necessitates new means of finance to play out properly, including taking into account macroeconomic developments, particularly the changing rupee and growing inflation.” “Satyendra Pandey, managing partner of aviation consulting business AT-TV, agreed. “Some airlines have made large orders only to discover that they are unable to secure acceptable financing.” While this is hardly the desired consequence, especially with a family as powerful as the Tatas, it must be anticipated.”

According to Bloomberg News, Air India’s parent company, Tata Group, is also close to placing an order for Airbus A350 long-range planes capable of travelling as far as the US West Coast from New Delhi. The airline, which was formerly famed for its luxury services and commercials featuring Bollywood stars, still has lucrative landing slots at most major airports, but it confronts competition from international airlines that fly straight to India, as well as carriers that travel via Middle Eastern hubs.

The airline was purchased by Tata earlier this year in the most high-profile privatisation under Prime Minister Narendra Modi. It plans to merge its aviation divisions, which include four airline brands.

A new jet purchase, especially one with advantageous long-term maintenance conditions, would help it decrease expenses and compete better with rivals who offer extremely low tickets.

By adele rose

Adele Rose is the senior editor and employee of WGBS Pvt Ltd Digital wing.

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