Air India Ltd. is considering ordering as many as 300 narrowbody jets, according to people familiar with the matter, in what could be one of the largest orders in commercial aviation history as the formerly state-run airline looks to overhaul its fleet under new ownership.
The carrier may order Airbus SE’s A320neo family jets or Boeing Co.’s 737 Max models, or a mix of both, the people said, asking not to be identified because the discussions are confidential.
A deal for 300 737 Max-10 jets could be worth USD 40.5 billion at sticker prices, although discounts are common in such large purchases.
Winning a narrowbody order in India would be a coup for Boeing, as rival Airbus dominates the skies in the country, 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 narrowbodies, ordering more than 700, and others including Vistara, Go Airlines India Ltd. and AirAsia India Ltd. fly planes from the same family.
Production and delivery of 300 planes would likely take years or even more than a decade. Airbus builds about 50 narrowbody jets in a month, with plans to increase that to 65 by the middle of 2023, and 75 by 2025.
Representatives for Air India and Boeing declined to comment. An Airbus representative said the company is always in contact with existing and potential customers, but any discussions are confidential.
Air India’s owner Tata Group is also close to ordering Airbus A350 long-range jets that are capable of flying as far as the US West Coast from New Delhi.
Once known for its premium services and advertisements featuring Bollywood stars, the airline still has lucrative landing slots at most major airports, but it faces competition from foreign airlines with nonstop services to India, as well as carriers that fly via hubs in the Middle East.
Air India has not bought a single aircraft since 2006 when it placed orders for purchasing 111 aircraft — 68 from the US-based aircraft manufacturer Boeing and 43 from European aircraft manufacturer Airbus.
Tata bought the airline earlier this year in the most high-profile privatization under Prime Minister Narendra Modi. It is expected to consolidate its aviation businesses, including four airline brands.
An order for new planes, especially with favourable terms on long-term maintenance, would help it cut costs and compete better with rivals that offer very cheap fares.
On the sidelines of the 78th annual general meeting of the International Air Transport Association, aviation industry sources said Air India is considering buying 200 new planes. The share of narrow-bodied aircraft to that of wide-bodied planes will be 70:30.
Airbus’ top executives are among the hundreds of airline and aerospace company bosses who are in Doha, attending the two-day annual general meeting of the International Air Transport Association (IATA).
According to Air India’s website, the airline has a total of 49 wide-bodied aircraft – 18 Boeing B777, 4 Boeing B747 and 27 Boeing B787 – in its fleet. The carrier has 79 narrow-bodied planes in its fleet too.