Air India Ltd made aviation history by agreeing to purchase 540 aircraft from Boeing and Airbus, which will help the Tata Group airline expand its horizons in India and abroad. Air India’s purchase of short- and long-haul aircraft is estimated to cost $82 billion at list price, though the actual cost would be lower because bulk orders come with discounts and incentives.

470 of the 540 aircraft are firm orders, with the remaining 70 being options with Boeing that Air India can exercise in the future. The 470 planes include 250 Airbus and 220 Boeing planes, the first of which will arrive later this year. The previous single largest jet order, according to Bloomberg, was a 460-plane deal signed by American Airlines in 2011.

“The first aircraft to arrive will be 25 brand-new Boeing B737-800s and six Airbus A350-900s in the second half of 2023, with deliveries really ramping up in 2025 and beyond. Meanwhile, “our capacity growth will be supported by the previously announced lease-in of additional narrow-body and wide-body aircraft, as well as the restoration-to-service of the remainder of our grounded fleet,” said Air India CEO Campbell Wilson in an email to employees.

About 450 of the total order are single-aisle aircraft from the Airbus 320 family and the Boeing 737 MAX, which will fly domestic and short-haul international routes. The remaining 90 planes are dual-aisle aircraft that will fly to Europe and the Americas.

N. Chandrasekaran, chairman of Tata Sons Ltd, said earlier in the day that the group is committed to making Air India a world-class airline. “The wide-body A350 aircraft will be used to fly all ultra-long distances around the world,” says the company “He stated. Airbus has also ordered 210 narrow-body A320neo family planes. The conglomerate also has the option of increasing the fleet order as the airline grows “He stated.

“Air India is more than a project. It is a national initiative. There are a lot of expectations. We are undergoing a significant transformation because we are dedicated to building a world-class airline known for safety, on-time performance, the best of Indian hospitality, a modern fleet, and a wholesome experience for every passenger, whether they are in the first or last row,” Chandrasekaran added.

He also stated that the Tata Group intends to bring commercial aircraft manufacturing to India at some point in the future. “We are working on bigger partnerships, and one of our ambitions is to bring in commercial aircraft manufacturing at some point in time in the future. We have teams on both sides aligned, and we see this as the most significant moment for Tata Group, Air India, Indian aviation, and India’s manufacturing sector,” Chandrasekaran said.

Prime Minister Narendra Modi, French President Emmanuel Macron, Tata Trusts chairman Ratan Tata, commerce minister Piyush Goyal, aviation minister Jyotiraditya Scindia, Airbus CEO Guillaume Faury, and Air India MD & CEO Campbell Wilson all attended the virtual event to announce the order.

“This deal demonstrates deepening relations between India and France but is also a reflection of India’s success and expectations in the civil aviation sector. “Today, the aviation sector is an essential component of India’s development, and strengthening aviation is an important component of our national infrastructure strategy,” Modi said at the event.

US Vice President Joe Biden described the agreement as “historic.” “. “This purchase will support over one million American jobs in 44 states, many of which will not require a four-year college degree,” the company said “According to a White House statement.

With this order, Air India intends to make India a hub for international flights and to provide Indians with direct connectivity to various parts of the world, in line with the government’s goal of making India a hub for aviation.

At the moment, a sizable proportion of Indian passengers fly to various parts of Europe and the Americas, passing through airports in the Middle East, Europe, and Southeast Asia. “The time has come for India to become a global hub,” “According to Airbus CEO Faury.
The order is a “critically important landmark.” “CAPA India, an aviation consultancy, stated in a report.

“It is making up for the growing deficit that Air India has experienced for the last decade and more… Air India will have to commit to more orders, sooner rather than later, to take into account the replacement cycle for incumbent aircraft and the market’s tremendous growth potential,” CAPA stated in its report.

Others predicted that the order would boost India’s international trade. “It would almost certainly increase the intensity of the competition. Everyone has a great opportunity to expand their international business in the next 5-10 years. As a result, we anticipate double-digit revenue growth for the majority of industry participants over the next three to five years,” said Mitul Shah, head of research, institutional equity at Reliance Securities.

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Under the government’s privatisation programme, the Tata Group acquired a 100% stake in full-service carrier Air India and its low-cost subsidiary Air India Express in January 2022. AirAsia India, formerly a joint venture between AirAsia and the Tata Group, has since become a wholly-owned subsidiary of Air India. In November, the Tata Group announced the merger of Vistara, a 51:49 joint venture between Tata Sons and Singapore Airlines, with Air India, with Singapore Airlines owning 25.1% of the merged entity.

Air India currently has 113 planes. The group’s total fleet size is 219 planes, including AirAsia India’s 28 planes, Vistara’s 54 planes, and Air India Express’s 24 jets.

By the end of 2023, the Tata Group plans to create an Air India brand umbrella with a single low-cost platform and a single full-service platform. The former will be a joint venture of AirAsia India and Air India Express. The full-service carrier will be formed by the merger of Air India and Vistara. Vihaan, the company’s five-year plan, aims to capture a 30% share of the domestic and international markets.