Air India Seals Largest Aircraft Purchase Deal At $70 Billion, Orders 470 Planes From Boeing And Airbus, Deliveries To Commence Later This Year

In the largest aircraft purchase deal in aviation history, Tata-owned Air India on Tuesday placed an order for 470 passenger planes with European aircraft behemoth Airbus and American aviation giant Boeing.

The combined value of the 470-aircraft deal is estimated at $70 billion.

From Airbus, Air India has ordered 250 aircrafts, including 140 A320neo and 70 A321neo single-aisle aircraft as well as 34 A350-1000 and six A350-900 wide-body jets. The deal comes with an option to increase the size of this order.

From Boeing, the airline has ordered ten wide-body B777X planes, 20 wide-body B787 planes, and 190 narrow-body B737MAX planes, with an option for an additional 20 B787s and 50 B737MAXs. Air India also has the option to buy 70 more aircraft from Boeing.

"The agreement between Boeing and Air India includes options for 50 additional 737 MAXs and 20 787-9s. When finalised, this will be the largest Boeing order in South Asia and a historic milestone in the aerospace company's nearly 90-year partnership with the carrier," said Boeing in a statement. 

Along with the aircraft order, Air India has signed deals with engine manufacturers:

• CFM International (for narrow-body A320/B737s)

• G.E. (for Boeing 777x/787)

• Rolls-Royce for A350-type planes

The deal with Airbus was inked in a video conference attended, among others, by Prime Minister Narendra Modi, French President Emmanuel Macron, Commerce Minister Piyush Goyal, Civil Aviation Minister Jyotiraditya Scindia, Tata Group Chairman Emeritus Ratan Tata, Airbus chief executive Guillaume Faury and Tata Sons chairman N Chandrasekaran.

President Macron termed it a "landmark deal", demonstrating not just deep relations between India and France but also India's success and expectations in the civil aviation sector.

Later in the day, PM Modi and U.S. President Joe Biden spoke over the landmark agreement between Air India and Boeing. Both welcomed the deal as a "shining example of mutually beneficial cooperation".

"I am proud to announce today the purchase of over 200 American-made aircraft through a historic agreement between Air India and Boeing. This purchase will support over one million American jobs across 44 states, and many will not require a four-year college degree," U.S. President Joe Biden said in a statement today.

"Together with Prime Minister Modi, I look forward to deepening our partnership even further as we continue to confront shared global challenges—creating a more secure and prosperous future for all of our citizens," Biden said.

In what will be a big boost to Air India's fleet revamp plan, at least 25 brand-new Boeing B737-800s and 6 Airbus A350-900s will arrive by the second half of 2023. The bulk of the planes will be delivered from mid-2025 onwards. A350 will be utilised for the ultra-long haul.

Air India, earlier under the ownership of the government, had acquired new aircraft more than 17 years ago.

The airline's last order was for 111 planes -- 68 from Boeing and 43 from Airbus -- and that deal was worth USD 10.8 billion. The order was placed in 2005.

 On January 27, when the Tata Group completed the first year of taking over Air India, the airline said it was "finalising a historic order of new aircraft to power future growth.