Air India Plans Massive 500+ Aircraft Order

by | Jan 15, 2023

Air India, the flag carrier airline of India, is expected to announce an order of approximately 500 planes from both Boeing and Airbus as the company prepares to expand under the ownership of Tata Group.

The order would be the largest in the history of Indian aviation and one of the largest across the industry, giving Air India an order book similar in size to United Airlines.

Air India To Place Order For 500 Aircraft

The news was confirmed by Steven Udvar-Hazy, executive chairman of Air Lease Corporation, speaking at the Airline Economics conference. The order is anticipated to consist of 400 narrow-body aircraft which would be a mix of Airbus A320neos, A321neos, and Boeing 737 MAXs aircraft and 100 wide-bodies including Boeing 787s, 777Xs, potentially some 777 freighters, and Airbus A350s.

This is an interesting move. Air India currently operates a narrowbody fleet composed entirely of Airbus aircraft and a widebody fleet of Boeing 777s and 787s. By adding Boeing airframes to the narrowbody fleet and Airbus to the widebody fleet, Air India is losing fleet consistency which will make for a more complicated operation.

According to Reuters, that negotiations with engine suppliers are currently holding up the deal. Since information is being confirmed by the head of a leasing company, it’s likely that lessors are involved in the negotiations.

Air India Under The Tata Group

Air India has been in the process of privatization since 2017, when the government of India approved the privatization of the airline. The transaction was confirmed in October 2021 when the Air India, Air India Express, and 50% of AISATS were sold for $2.3 billion to Talace Private Limited, a Tata Sons’ special purpose vehicle. The airline was officially handed over to Tata Group on January 27, 2022.

The transaction gave Tata Group a large position in Indian aviation market. Tata is the owner Vistara which it operates as a joint-venture with Singapore Airlines but has confirmed would be merged with Air India. Tata Group also owns AIX Connect (formerly AirAsia India).

It’s expected that the new aircraft order will be shared across the Tata Group airlines as it works to consolidate the various brands. It’s a step in what the Tata Group hopes will be a renaissance for the brand under the conglomerate. The airline is now led by Campbell Wilson, formerly CEO of Singapore Airlines low cost carrier Scoot.

The purchase would be a bold move that throws down the gauntlet in Air India’s ambitions to rejoin the world’s leading airlines.

It’s unlikely that Air India will be the only airline to announce large orders in the near future as the aviation industry recovers from soft demand during the Covid-19 pandemic. Udvar-Hazy is quoted predicting, “We do expect a number of airlines will place large orders and again most of these orders will be for replacement.”

Bottom line

Air India, India’s flag carrier now privatized and owned by the Tata Group, is expected to announce plans to order around 500 planes. Finalization of the deal is said to depend on ongoing negotiations with engine makers. The order is anticipated to consist of 400 narrow-body aircraft and 100 wide-bodies. If completed, the deal would be one of the largest in history and underlines ambitions for the airline under its new ownership.

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