Winning Bizness Desk
Mumbai. Here comes the Mother of all aviation deals. Tata Sons' Air India has finalized an order to buy 500 aircraft which includes 430 narrowbody and 70 widebody aircraft, and will be delivered over the next seven to eight years. This order is for Air India, but it will also be for low cost carriers AirAsia and Air India Express. According to the report, European manufacturer Airbus has bagged a major part of this order. Airbus will fulfill the order for 240 A320 Neo and 40 A350 aircraft, while Boeing will supply 190 of 737 Max, 20 of 787 and 10 of 777x aircrafts. Its formal announcement is expected to be made next week. Its value is around $ 150 billion, but discounts are quite common in such big deals. This deal with Airbus was finalized in a meeting on Friday and it was attended by Tata Sons Chairman N Chandrasekaran and Airbus Chief Commercial Officer Christian Scheer. The deal with Boeing was signed on January 29 at Bombay House, the headquarters of Tata Sons in Mumbai.
Airbus has the monopoly
Airbus dominates the Indian market and India's civil aviation market leader Indigo is the world's largest customer of the Airbus A320. Winning such a huge order for narrowbody aircraft in India would be a coup for Boeing. Air India's deal with Boeing and Airbus is being called the Mother of All Aviation Deals. Notably, once the Government company Air India became private from 27 January 2022. It was taken over by Tata. After this Tata became the second largest airline of the country. On the other hand, talking about the aviation market, India's aviation market is currently the third largest market in the world. It is expected to double in the next 10 years.
Air India vs Indigo
Air India will be able to provide short-haul destination service of 4-5 hours with the narrowbody plane. With this, it will be able to give a tough competition to Indigo, which currently occupies more than 50% of the domestic market. The Wise Body aircraft will help Tata expand its footprint in North America, Europe and Australia. Air India is likely to add around 50 aircraft by the end of FY24, which will increase its capacity by around 50%. Since acquiring Air India early last year, the Tata group has been in talks with aircraft manufacturers to improve its fleet. Recently, Air India's Chief Executive Officer Campbell Wilson had said that Air India wants to increase its market share by 30% on both domestic and international routes in the next 5 years.