Tata Group-owned Air India is planning to order as many as 300 narrow-body jets, citing sources, news agency Bloomberg reported on Monday.
The report mentioned that this deal could be one of the largest orders in commercial aviation history as the formerly state-run airline looks to overhaul its fleet under new ownership.
The sources said that Air India likely to order Airbus SE’s A320neo family jets or Boeing Co.’s 737 MAX models.
A deal for 300 737 MAX-10 jets could be worth $40.5 billion at sticker prices, although discounts are common in such large purchases.
As Airbus dominates the skies in the country, winning a narrow-body order in India would be a coup for rival Boeing.
India was the world’s fastest-growing aviation market before the Covid-19 pandemic.
InterGlobe Aviation Ltd, which operates IndiGo, is the world’s largest customer for the European manufacturer’s best-selling narrow-body aircraft, ordering more than 700, while others are Vistara, Go Airlines India, and AirAsia India also fly planes from the same family.
However, production and delivery of 300 planes would likely take years or even more than a decade. Airbus builds about 50 narrow-body jets in a month, with plans to increase that to 65 by the middle of 2023, and 75 by 2025.
Representatives for Air India and Boeing declined to comment.
An Airbus representative said the company is always in contact with existing and potential customers, but any discussions are confidential.
Satyendra Pandey, managing partner of aviation advisory firm AT-TV, said, “This order presumably involves new methods of financing to play out in the right manner, including factoring in macro-economic trends, notably the fluctuating rupee and rising inflation. Some airlines have placed voluminous orders only to find that they are unable to line up financing at favorable terms. While it is not an outcome that one envisions and certainly not with a group such as the Tatas, nevertheless it has to be planned for.”
For Air India, Tata Group is also close to an order for Airbus A350 long-range jets that are capable of flying as far as the US West Coast from New Delhi.
Once known for its premium services and advertisements featuring Bollywood stars, Air India still has lucrative landing slots at most major airports in the world, but it faces competition from foreign airlines with non-stop services to India, as well as carriers that fly through hubs in the Middle East.