Air India signs deal to buy 250 aircraft from Airbus as part of expansion plans

Air India is expected to announce another deal signed with Boeing Co for about another 250 planes soon.

Tata Group-led carrier Air India signed agreements with Airbus SE to supply about 250 new planes, the airline said in an online press conference on February 14.

"Air India is not just another airline, it is a national project, it holds the hopes and aspirations of millions of Indians," Natarajan Chandrasekaran Chairperson of the Tata Group said in an online press conference.

Air India made the announcement in an online press conference along with Prime Minister Narendra Modi, French President Emmanuel Macron, Minister of Commerce and Industry Piyush Goyal, Airbus SE CEO Guillaume Faury, Air India CMD Campbell Wilson, Ratan Tata, and Minister of Civil Aviation of India Jyotiraditya Scindia.

Air India will get 250 Airbus planes -- 210 single-aisle A320neos and 40 widebody A350s, worth more than $50 billion at list prices. The airline will receive 140 A320Neos and 70 A321neo.

Air India is expected to announce another deal signed with Boeing Co for about another 250 planes soon.

This could be the single largest order by any airline as Air India prepares to revamp itself under the Tata Group with a fuel-efficient fleet.

Air India is looking to add over 90 planes to its fleet by 2025, including 56 planes that are part of mega aircraft orders signed with Airbus and Boeing.

These will be in addition to previously announced leases of 36 planes by the airline in 2022.

"The order for 250 planes is the first step in not only expanding Air India's capacity but also in the journey to manufacturing commercial aircraft in India," Chandrasekaran said.

He added that the Tata Group is committed to building a world-class airline, known for safety, on-time performance, Indian hospitality, having a modern fleet, and offering a wholesome experience to every passenger.

The Tata Sons Chairman added that Air India will use the widebody aircraft it is acquiring from Airbus to fly ultra-long-haul flights from India across the globe.

He added that Air India has options to increase the size of the order once Air India expands its operations.

Furthermore, Chandrasekaran added that with this deal, the partnership between Airbus and the Tata Group also expands.

"The Tata Group already works with Airbus to manufacture the C 295 Aircraft in India and with this deal, we will work towards starting the manufacturing of commercial aircraft in India as well," Chandrasekaran said.

Tata Air Systems Limited (TASL) and Airbus Defence and Space are aiming to complete a new factory in India to produce Airbus C295 Persuader transport aircraft by 2024.

Air India completed one year under the Tata Group on January 27. The Tata Group had acquired a 100 percent stake in Air India and Air India Express under a government-led strategic divestment programme.

In November, the group also announced that Vistara, a 51:49 joint venture between Tata Sons and Singapore Airlines, will be merged with Air India; Singapore Airlines is to hold a 25.1 percent stake in the merged entity.

The company has also implemented a five-year plan called Vihaan to capture a 30 percent share in the domestic and international markets. As part of the plan, the carrier also aims to focus on growing both its network and fleet, revamping its customer proposition, reliability and on-time performance, technology, sustainability, and innovation and wants to invest in the best talent in the industry.

Air India, earlier under the ownership of the government, had acquired new aircraft more than 16 years ago.

It has not purchased a single aircraft since 2005 and the last order was for 111 aircraft -- 68 with Boeing Co and the remaining 43 with Airbus -- and that deal was worth $ 10.8 billion.

Last week, aviation consultancy CAPA said Indian carriers are likely to place orders for up to 1,700 planes by 2024 and Air India may make the first move with some 500 planes order.

Currently, Indian carriers operate less than 50 wide-body aircraft, an insignificant number for such a significant market. In contrast, Emirates alone has a fleet of over 260 wide bodies, CAPA had said.

Recently, IndiGo started wide-body operations on the India-Turkey route with a wet-leased B777 and plans to induct two more such planes.