PARIS/NEW DELHI: Sources said on Sunday that Air India is close to placing landmark orders for as many as 500 jetliners from Airbus and Boeing as it seeks a renaissance under the Tata Group.
They spoke on the condition of anonymity as the final touches were being put on the massive deal. The orders include as many as 400 narrow-body jets and 100 or more wide-body jets, including dozens of Airbus A350s and Boeing 787s and 777s.
Such a deal could surpass $100 billion at list prices, including any options, and rank among the largest in terms of volume placed by a single airline, surpassing an order placed by American Airlines more than ten years ago for 460 Airbus and Boeing aircraft.
The deal, which would be worth tens of billions of dollars even after sizable anticipated discounts, would end a tumultuous year for plane giants, whose jets are once again in demand following the pandemic but who are also facing increasing industrial and environmental pressures.
It would also allow Airbus to secure a home for some A350 production slots initially earmarked for Russia's Aeroflot and now left open because of war-related sanctions against Moscow.
Airbus and Boeing declined to comment. Tata Group-owned Air India did not respond to a request for comment.
China last week delivered its first C919 jetliner but is at least a decade away from competing on such a scale, experts say.
The potential blockbuster order comes days after Tata announced the merger of Air India with Vistara, a joint-venture with Singapore Airlines, to create a bigger full-service carrier and strengthen its presence in domestic and international skies.
That deal gives Tata a fleet of 218 aircraft, cementing Air India as the country's largest international carrier and second largest in the domestic market after leader IndiGo.
Buying debt-ridden Air India has also given Tata access to valuable flying rights and landing slots, especially to destinations in the United States and Europe.
Air India's Maharajah mascot was once synonymous with lavishly decorated planes and stellar service, but its reputation declined in the mid-2000s as financial troubles mounted.
Tata wants to re-capture more of India's overseas diaspora and cities such as Delhi and Mumbai, dominated by foreign rivals such as Emirates and Etihad. Air India also wants to win a bigger share of regional international and domestic traffic, setting up a battle with IndiGo. Founded by JRD Tata in 1932, Air India was nationalized in 1953.
Air India also wants to win a bigger share of regional international traffic and the domestic market, setting up a battle on both fronts with IndiGo.
Delivered over the next decade, the 500 jets would replace and expand fleets in the world's fastest-growing air travel market, while contributing to Prime Minister Narendra Modi's goal of expanding the economy to $5 trillion.
But experts warn many hurdles stand in the way of the Indian carrier's ambition to recover a strong global position. They include frail domestic infrastructure, pilot shortages, and the threat of tough competition with established Gulf and other carriers.
One industry source said new Boeing 737 MAXs will most likely go to Air India Express, the company's budget airline, which could be renamed.
Insiders say plane and engine makers have been clamoring at Air India's door for months, with new Chief Executive Campbell Wilson refusing to rush the make-or-break fleet decision.
Reuters reported in July that Air India was taking more time to study Airbus A350s and Boeing wide-body 787 and 777 models, on top of a probably mixed order for smaller single-aisle jets.
Last month, Campbell confirmed talks to "greatly expand" Air India's fleet over the next five years and said, "At the risk of gross understatement, the investment will be substantial."
Source: Reuters