The CEO of Air India stated that the order will be paid for using shareholder equity.
During a press conference on Monday, Air India CEO Campbell Wilson said that the airline had placed an order for 470 aircraft from Airbus and Boeing at a list price of $70 billion.
How will Air India fund its 470-plane order?
Additionally, the CEO of the Tata-owned airline stated that the acquisition will be funded by internal cash flow, equity, and aircraft sale and leaseback.
“We have committed to a historic order of new aircraft that will start entering the fleet from the end of this year through the end of the decade, to both transform the fleet and power significant network and capacity expansion,” Wilson added.
“Air India has embarked on probably the greatest transformation in aviation history,” Wilson noted.
The megadeal with Air India:
The airline stated earlier this month that it will be adding 470 planes to its fleet. 220 jets would be purchased from Boeing, while 250 planes would be purchased from Airbus. This is the largest single order purchase made by an aeroplane.
The airline stated last week that it will be employing around 5000 pilots and cabin staff members.
“We are adding 500 cabin crew members every month,” Wilson remarked at the news conference.
Future fleet expansion plans:
It is worth mentioning that Air India Chief Commercial and Transformation Officer Nipun Aggarwal claimed in a now-deleted LinkedIn post that the arrangement with the aircraft makers contains 370 options in addition to a purchase of 470 jets. This implies the airline could acquire 370 more planes for the same price it paid for the initial group of 470 planes.
The merger of Air India and Vistara:
The airline’s CEO also stated that the Air India-Vistara merger is in its preliminary stages. The merger would next be approved by the DGCA, followed by CCI’s approval. The Tata group plans to have one full-service airline and one low-cost airline by the end of the decade.