A day earlier, Indian budget airline IndiGo placed a firm order for 500 Airbus A320 passenger jets. At least on paper, it’s the biggest deal in commercial aviation history.
Air India CEO Campbell Wilson said the massive order would allow Air India to “operate the most advanced and fuel-efficient aircraft” within five years and boost India’s position on the global stage. The deals were first announced by Air India in February, but became official this week.
“We are proud to work with all our partners, including Airbus, on this journey to reinvent global aviation, which reflects India’s growing confidence around the world,” Wilson said.
The Airbus chief commercial officer called Air India’s expansion “one of the most ambitious projects in the airline business today”. Boeing CEO Stan Diehl said the deal “shows [Air India’s] Confidence in our products and services in the world’s fastest growing aviation market.
According to Mike Boyd, a commercial aerospace analyst at Boyd Group International, Airbus currently owns the most attractive jets on the market. But the jet maker is in a “production chokehold” and orders have been pushed back, unable to meet Air India’s full demand.
“Seeing that Airbus couldn’t meet that demand, they called their friends in Seattle. Even in this deal, the Boeing pedigree is clear,” Boyd said.
The Indian government plans to open 100 new airports in the country by 2024, which could double its air force from 600 to 1,200 aircraft, according to India’s Finance Minister Nirmala Sitharaman. The new airports are part of a plan to revamp the country’s transport infrastructure to make air travel cheaper and more accessible between a new network of regional airports.
Air India’s deal with Boeing is for 190 737 MAXs, 20 787 Dreamliners and 10 777X jets with an option to purchase an additional 50 737 MAXs and 20 787 Dreamliners, a company statement said. The airline has an order with Airbus for 210 A320neo and A321neo narrow-body jets and 40 A350 widebodies.
At list prices, Air India’s contracts with Boeing and Airbus are worth $70 billion, Air India’s Wilson said in February. But these types of deals are typically 25 percent off list prices, Boyd said, adding that order specifications are subject to change based on advances in technology and regulation.
The first jets under Airbus’ contract with Air India will be wide-body A350s and will be delivered by the end of the year, company spokesman Stephen Schafrath told The Washington Post. Shafrath said the Airbus deal with IndiGo has a delivery window starting in the “early 2030s”. Boeing declined to disclose a delivery window for its contract.
Airbus produces 65 jets per month and is booked with orders through 2029, Schafrath said. By 2026, the jet manufacturer expects production to increase to 75 jets per month.
Boeing shares fell more than 3 percent on Tuesday.