Air India is expected to sign a $1 billion deal with Boeing, engine supplier General Electric and CFM International on Friday for 495 aircraft.
Air India will close Friday orders for about 495 aircraft worth $5 billion from Boeing and engine suppliers General Electric and CFM International, two industry sources said.
Air India will order 190 Boeing 737 MAX cooperative aircraft, 20 Boeing 787s, and 10 Boeing 777Xs on the first anniversary of the Tata Group after months of careful security and tough negotiations. Sources told Reuters that it had taken over control of the former national airline.
The second half of the order, which includes about 235 Airbus narrow-body aircraft and about 40 Airbus A350 wide-body aircraft, is expected to be officially completed within days, industry sources told Reuters.
Senior officials from Boeing, GE, and CFM in India are expected to celebrate a deal on Friday.
Despite previous expectations of a single coordinated announcement, it’s unclear which deals could be revealed, especially at the Aero India Airshow scheduled for February, when such deals are usually unveiled.
Manufacturers Boeing and Airbus, CFM’s joint venture partners GE and Safran declined to comment. Air India did not respond to a request for comment.
The order, when completed, aims to bring Air India into the alliance of major global airlines and make it an influential customer for aircraft manufacturers and suppliers at a time when The airline’s domestic market is seeing an uptick in post-Covid travel.
India’s domestic air passenger traffic has grown 47% in 2022 from a year ago, according to government data.
Analysts warn that the airline faces stiff competition due to the connectivity established by domestic and international competitors.
India, which is about to overtake China as the world’s most populous country, has a large but underserved air travel market dominated by low-cost carrier IndiGo. However, most of the passenger traffic going from India is carried out by Middle Eastern airlines such as Emirates and Qatar Airways. AIR INDIA RESURGENT Under its new owner, Air India is seeking to restore its reputation at home and abroad as a historic carrier with impeccable service and world-class aircraft.
It has brought back into service nearly 20 planes that have been grounded for years due to a lack of spare parts and money. The airline also said it will spend more than $400 million to refurbish its entire legacy wide-body fleet of 27 Boeing 787-8s and 13,777 aircraft.
The goal is to capture 30% of the domestic air freight market within the next 5 years, closing the gap with market leader IndiGo. The airline’s new CEO, Campbell Wilson, has previously said that the airline also wants to increase “a lot” of its current international travel market share.
Tata’s four airlines, including two low-cost carriers, Air India and Vistara, a joint venture with Singapore Airlines, have a combined market share of 24%.
Analysts say Air India may pick up some passengers from rival Gulf carriers, but not before its fleet quality and service is on par. The national battle with IndiGo also would not have happened without fierce competition from a service provider that continues to grow.