Air India May Capitalise On US-China Trade War, Could Acquire Rejected Boeing Aircraft To Boost Fleet: Report

Air India Ltd is considering acquiring Boeing Co aircraft that were turned down by Chinese airlines, according to sources close to the situation quoted in the NDTV report. This move places them among other Asian airlines seeking to capitalise on the trade conflict between Washington and Beijing.

The carrier owned by the Tata Group, in dire need of aircraft to speed up its recovery process, intends to negotiate with Boeing to purchase several jets initially prepared for Chinese airlines. However, reciprocal tariffs impeded the transfer. This information comes from sources closely acquainted with the discussions within the Indian airline, who wished to remain anonymous due to the non-public nature of the information.

Air India is keen to secure slots for future deliveries if they open up, according to sources. The airline has previously profited from China's withdrawal, accepting 41 737 Max jets constructed for Chinese airlines, whose deliveries had been postponed since the model was grounded in 2019.

Spokespersons for both Air India and Boeing chose not to provide any comments. Additionally, Bernama reported on Sunday that Malaysia Aviation Group Bhd is also negotiating with Boeing regarding delivery slots that were left open by Chinese carriers.

Last week, Bloomberg News reported that the Chinese government instructed its airlines not to take delivery of Boeing aircraft. This was in response to Beijing imposing reciprocal tariffs of up to 125 per cent on goods manufactured in the US. At the time, around 10 planes were ready for delivery, and a number of 737 Max jets in China have since been returned to the US.

Potential buyers may face challenges with Boeing planes that are already constructed or under construction, due to the predetermined cabin configurations set by the initial customer, and the fact that some payments may have already been processed. Boeing is unable to allocate any aircraft to new owners if they are currently under contract with Chinese airlines.

Air India is keen on acquiring additional ready-made Max narrowbodies for its Air India Express division, according to sources. The airline's strategy is to develop its budget subsidiary to compete with InterGlobe Aviation Ltd, the company that runs IndiGo, the leading carrier in India.

Bloomberg News reported earlier this month that Air India was anticipated to acquire an additional nine stored 737s by June, bringing the total count to 50 aircraft. Initially, it was predicted that this supply would be exhausted in a few months. However, due to the impact of the US-China tariff war reshaping the situation, it is possible that Air India's procurement of Boeing aircraft may persist.