Air India to Finalize a Deal of 500 Jumbo Planes Soon, Tata Group to Give the Airline New Wings

Air India to close a large deal with manufacturers Airbus and Boeing, as well as GE and Safran as joint venture partners of CFM in the coming days.

Written by: Arjita Gupta

Edited by: Krutarth Ghosalkar

Last Updated: February 16, 2023

Air India is determined to revive the airline and pitch it against larger rivals by sealing half of the order for 495 jets, worth billions of dollars. The deal is with CFM International and General Electric (engine suppliers) and Boeing. The order is for 10 Boeing 777X, 20 Boeing 787s, and 190 Boeing 737 MAX narrowbody planes, marking the one-year completion from when the Tata Group took ownership of Air India. In the coming days, the second half of the order including that for 40 Airbus A350 widebody aircraft and 235 Airbus (AIR.PA) single-aisle jets may also get wrapped up formally.

The Aero India air show in February may throw some light on the deal, which has not yet been confirmed by Air India, as well as the manufacturers of Airbus, and Boeing. The order, once finalized, aims to put Air India in the league of large global airlines and make it an influential customer for plane makers and suppliers at a time when its home market is seeing a strong post-Covid travel surge, the airline looking for better opportunities, and rise up to its original status.

Rather, make it a lot better by fighting off the dust of the past, and giving a fresh perspective to how Air India will function hereon. Air India is already in talks to close a deal of around 500 jets, putting the airline in an influencing position not just in India, but abroad as well. Because of the surge in travel by people after the Covid lockdown came to an end. In 2022, domestic passenger air traffic grew by 47% for India. But Air India was posed by competition by international and local rivals given the connectivity.

While the majority of outbound traffic from India is taken care of by Qatar Airways and Emirates of the Middle Eastern airlines, Air India has its eyes set on carving its own niche soon overseas as well. For the next 5 years, Air India is planning to capture domestic air travel, accounting for 30% of its sales, competing with IndiGo, the current market leader. The airline also intends to increase its share in international travel, according to Campbell Wilson, the new Chief Executive. With the aim to restore its reputation overseas and in India, Air India plans to reform and host world-class planes.

Already 20 aircraft are back in service, the ones that were grounded for years because of insufficient funds and lack of parts. The airline is also prepared to spend more than $400 million to restructure the fleet of 13 777 and 787-8s aircraft and 27 Boeing planes. The market share for Tata’s airlines – Vistara, Air India, and the other two budget carriers is 25% combinedly after the joint venture with SIAL.SI (Singapore Airlines). But a significant spike in the airline’s quality of service and fleet will also oversee certain competition and challenges from rival Gulf carriers and domestic airlines.

Source: With record 470 aircraft order, how the Tata Group is getting ready to change Air India forever