This year’s most publicized privatization in India resulted in Tata purchasing Air India. Air India is quick to move forward as it prepares one of the largest aircraft deals in history.
Must Watch: Would you live on 3D Printed Mars for a year for $60,000?
According to sources acquainted with the situation, Air India Ltd. is contemplating placing one of the biggest orders in commercial aviation history for up to 300 narrowbody planes as the once state-run airline prepares to modernize its roster under new ownership.
According to the source, who requested anonymity because the talks are private, the carrier may acquire aircraft from either Boeing Co.’s 737 Max models or Airbus SE’s A320neo family, or a combination of both. Even though concessions are typical in such bulk transactions, a deal for 300 737 Max-10 planes may cost $40.5 billion at list pricing.
It would be a victory for Boeing to land a narrowbody order in India, where rival Airbus rules the skies and was, prior to the Covid outbreak, the world’s fastest-growing aviation market. With more than 700 orders for the best-selling narrowbodies from the European manufacturer, IndiGo, a subsidiary of InterGlobe Aviation Ltd., is the largest buyer in the world. Other airlines that operate aircraft from the same family include Vistara, Go Airlines India Ltd., and AirAsia India Ltd.
Production and delivery of 300 planes will certainly take years or maybe beyond a decade. With plans to raise production to 65 by the middle of 2023 and 75 by 2025, Airbus now produces 50 narrowbody aircraft each month.
Subscribe to GreatGameIndia
Representatives for Air India and Boeing declined to comment. According to an Airbus official, the corporation is always in communication with both current and potential clients, but all conversations are private.
“This order presumably involves new methods of financing to play out in the right manner, including factoring in macroeconomic trends — notably the fluctuating rupee and rising inflation,” said Satyendra Pandey, managing partner of aviation advisory firm AT-TV. “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.”
According to a recent Bloomberg News article, Tata Group, the company that owns Air India, is also close to placing an order for Airbus A350 long-range aircraft, which can travel as far as the US West Coast from New Delhi. Although the airline still has lucrative landing slots at most major airports, it is now competing with foreign airlines that fly nonstop to India as well as airlines that fly via hubs in the Middle East. The airline was once known for its premium services and advertisements starring Bollywood stars.
This year’s most publicized privatization under Prime Minister Narendra Modi resulted in Tata purchasing the airline. The company’s aviation operations, including its four airline brands, are anticipated to be consolidated. It could reduce expenses and more effectively compete with rivals who offer extremely low tickets if it placed an order for new aircraft, especially with advantageous arrangements on long-term upkeep.