An Indian airline has ordered a record 470 planes, worth more than $100 billion at list prices, from Boeing and Airbus, in a sign of the scale of the post-pandemic rebound in the aviation industry and the growing market in India.
The deals, struck by Air India, are part of an ambitious overhaul by the Tata Group, the powerhouse conglomerate that took control of the carrier about a year ago. It is planning to buy 220 jets from Boeing and 250 from Airbus, and is expected to pay less than list price, as is typical in such transactions.
In a statement, President Biden said the Boeing order would support more than one million American jobs, many of which would not require a college degree. He also said the deal reflected the strength of the ties between the United States and India. President Emmanuel Macron of France echoed a similar sentiment with respect to Airbus. Both leaders spoke separately with Prime Minister Narendra Modi of India.
The airline business is booming in India, with the government planning to build 80 new airports over the next five years. Boeing has projected that passenger traffic in the country will increase 7 percent annually over the next two decades.
Tata Group is buying single-aisle and wide-body jets from both Boeing and Airbus, which expect to start deliveries late next year. Tata, which makes the Land Rover, operates the historic Pierre Hotel in New York and sells Tetley tea globally, also owns two other airlines — Vistara, a full-service carrier in partnership with Singapore Airlines, and AirAsia India, a budget airline. The company operates 230 aircraft and employs thousands of pilots and crew members.
The new planes will be used to expand Air India’s footprint and add more long-distance routes, Natarajan Chandrasekaran, the chairman of the conglomerate’s holding company, said on Tuesday.
Brendan Sobie, a Singapore-based airline consultant, said the order is just one step toward transforming Air India, which needs a major restructuring and to modernize its fleet.
“The number is record-breaking not only in India but anywhere,” he said. “India is a massive market, and there is a lot of growth potential.”
Air India returned to its roots when Tata Group completed its $2.4 billion purchase. It was founded in 1932 by the industrialist J.R.D. Tata and nationalized by the Indian government in 1953. The airline was once known for its lavishly decorated planes and remains the country’s largest international carrier.
But its heyday has long been over. Before the government sold Air India, the carrier was losing nearly $2.6 million a day, according to civil aviation officials. It has also been marred by controversies of poor on-time performance and bad customer service. Recently, airline officials came under intense criticism over their handling of an episode involving a passenger urinating on another passenger.