Air India is close to closing a deal with Boeing for up to 150 737 MAX aircraft, in what will be the company’s first major order since it was taken over by Tata Sons.
The information was reported by Arindam Majumder from The Economic Times of India citing sources close to the company, which also detailed that the order will comprise 50 firm aircraft and options for up to 100 more.
Air India would have favored Boeing as it can guarantee the immediate delivery of 50 aircraft originally destined for China Southern (the MAX has not yet been recertified in China), while Airbus could only deliver the first A320neo in 2025.
However, the same sources indicated that the European manufacturer would still have a chance of winning an order as Air India is «hungry» for new aircraft to support an aggressive expansion plan that includes a 30% increase in both domestic and international capacity.
The company had recently concluded lease agreements for thirty aircraft to be delivered over the next twelve months. The company will take delivery of 21 Airbus A320neo and four A321neo aircraft gradually starting in the first quarter of 2023. In addition, five Boeing 777-200LRs will join the fleet between December this year and March 2023. The wide-body aircraft will be used primarily on routes between India and the United States. Last week it closed a new deal for six A320neo and six additional Boeing 777-300ERs, which are expected to enter the fleet during the first four months of 2023.
Air India’s narrowbody fleet currently consists of 20 A319s, nine A320s, 27 A320neo and 20 A321s, while its subsidiary Air India Express operates 24 Boeing 737-800s and AirAsia India 28 A320s. On the other hand, its «sister» company, Vistara, which will be merged with Air India, has 2 A320s, 41 A320neo, 5 A321neo and 5 B737-800s.
Singapore Airlines (SIA) currently owns 49% of Vistara, with the remaining 51% held by Tata Sons, while Air India is, since January this year, owned by the Indian holding company (including Air India Express and AirAsia India).
To materialize the merger, which is expected to occur in March 2024, SIA will invest USD 250 million in Air India, thus obtaining 25.1% of the shares of the new group it will form with Vistara. But additional capital injections from Tata and SIA to finance the growth of the new Air India could reach USD 615 million by 2024, depending on the progress of the business plan and access to other funding options.
