Air India unveiled the largest plane order in the history of commercial aviation Tuesday, saying it would buy 470 Boeing (BA) and Airbus (AIR.PA) jets as global travel rebounds from the pandemic and India flexes its ambitions for economic and commercial growth.
- Air India said it would buy 470 Boeing and Airbus planes Tuesday, the largest order in commercial aviation history.
- The airline committed to buy 250 Airbus and 220 Boeing planes and received purchase options for 50 more from Boeing.
- Air travel has surged after a virtual halt at the outset of the pandemic and plane makers have struggled to meet the demand for new planes.
- Deliveries are expected to start in earnest by mid-2025, while a few of the planes are due to arrive by the end of this year.
Air India, owned by the Tata conglomerate since last year's privatization, committed to buying 220 Boeing jets, including 190 midrange, single-aisle 737 Max planes, 20 widebody 787 Dreamliners, and 10 widebody, long-range 777X planes. The carrier also acquired options to purchase 50 additional 737 Max planes and 20 787-9's, the larger version of the Dreamliner, according to Boeing. The order will support more than 1 million U.S. jobs across 44 states, according to the White House.
Boeing's European rival, Airbus, said it landed an order for 250 planes from Air India, including 140 A320neo and 70 A321neo single-aisle jets as well as 40 A350 widebodies.
Air India's order is the largest order of planes by a single carrier, topping a 2011 deal for 460 planes by American Airlines, according to Bloomberg. Boeing's contract based on the planes' list prices is valued at almost $46 billion, according to The Wall Street Journal, though bulk purchasers typically receive large undisclosed discounts.
Air India currently operates a fleet of approximately 100 mostly leased passenger planes including Boeings as well as Airbuses. The airline said deliveries of most of the planes it ordered would start in mid-2025.
Boeing and Airbus have struggled to ramp up production to meet unprecedented demand. Boeing delivered 38 planes to customers in January and had more than 5,400 unfilled orders as of month-end. The company said it would add Air India's order to its backlog once the deal is finalized. Airbus is to deliver six A350s originally earmarked for Aeroflot, the sanctioned Russian airline, this year under its deal with Air India. The airline also acquired purchase options for an undisclosed number of Airbus aircraft.
Boeing and Airbus both estimate India will need more than 2,200 new planes over the next two decades. If 1% of the country's 23 million daily rail passengers upgraded to commercial flights, the size of India's commercial aviation market would double, according to a Boeing executive quoted by Bloomberg. The number of flights in the country has already surpassed pre-COVID levels, while global air departures are still at 77% of their level before the pandemic, according to the same executive.
Boeing shares gained 1.5% by the afternoon in New York, while Airbus was up less than 1% in Paris trading.