Air India, the state-run airline, has placed a massive order for 470 planes with Airbus and Boeing, which is set to be the largest purchase in commercial aviation history. The order is a part of Air India's plan to build a fuel-efficient fleet that will compete with domestic low-cost rivals and powerful Gulf airlines, as well as help the carrier become a global force after years of contraction. The company will purchase 250 Airbus jets, including 210 A320neo family aircraft and 40 A350s, and 220 Boeing models, comprising 190 737 Max, 20 787s, and ten of its largest 777X. According to separate announcements on Tuesday, the order was valued at $34 billion at list price. The Airbus part of the deal was announced in an online briefing that was attended by Indian Prime Minister Narendra Modi and French President Emmanuel Macron, while US President Joe Biden announced the Boeing commitment a few hours later.
Air India will begin receiving the A350s before the end of 2023, and the initial batch of six planes are being built for Russia’s Aeroflot, which is no longer able to take aircraft due to sanctions following the invasion of Ukraine. Christian Scherer, Airbus’s sales chief, said that Air India also has significant options to increase its Airbus order as the carrier grows. The company will use the A350s to offer non-stop services “deep into all the continents of the world.” Boeing said that the carrier may eventually add 50 more 737 Maxes and 20 787s.
Boeing’s win in India contrasts with its performance in China, where the company has essentially been frozen out of new orders amid recent geopolitical turmoil and the grounding of the 737 after two deadly accidents in rapid succession. China used to take a quarter of Boeing’s 737 output, and it’s been over three and a half years since a mainland Chinese airline took delivery of a new jet from the company’s bestselling line. Boeing projects that India will need 2,210 new planes over the next two decades, a number that’s broadly in line with Airbus’s forecast for the country. By comparison, China remains a far bigger market for Boeing — it expects the country will need 8,485 new aircraft through 2041.
The order also comes as airlines globally upgrade and refresh their fleets to cash in on the rapid rebound in travel after Covid. Locking in fresh aircraft commitments is key for Air India's expansion plan as the supply of newly built aircraft becomes increasingly constrained. Air India’s mega deal is part of a push to expand India’s aviation industry, as Modi said at the briefing. The country wants to be a hub for maintenance and repair operations for the region as well. UK’s Prime Minister Rishi Sunak said Air India’s order bolstered Airbus’s decision last year to invest over £100 million at its wing assembly plant in Wales, as well as add 450 jobs. It will also boost employment at Rolls Royce, which makes engines for the A350 model that Air India will order.
