In an effort to revitalise the airline and compete with far larger rivals, Air India will on Friday finalise half of a multibillion dollar contract with Boeing, engine suppliers General Electric and CFM International, and a total of 495 planes.
On the day that marks one year since Tata Group gained control of the former state-run carrier, Air India is expected to announce an order for 190 Boeing 737 MAX narrowbody aircraft as well as roughly 20 Boeing 787s and 10 Boeing 777X, according to sources who spoke to Reuters.
It is anticipated that the second half of the deal, which includes roughly 235 Airbus single-aisle jets and about 40 Airbus A350 widebody aircraft, will be formally completed during the next few days.
Senior representatives from Boeing, GE, and CFM are anticipated in India on Friday to celebrate the deal.
It is yet unknown when either deal would be made public, despite early hopes for a single synchronised announcement, particularly with the Aero India air show in February approaching, when deals like this are typically announced.
Boeing and Airbus as well as GE and Safran, which are joint venture partners with CFM, declined to comment. An inquiry for comment from Air India was not answered.
Last month, Reuters reported that Air India was nearing an agreement to purchase approximately 500 aircraft.
When the purchase is completed, it will elevate Air India to the level of major international airlines and position it as a significant buyer for suppliers and planemakers at a time when its domestic market is seeing a significant post-Covid travel boom.
According to government statistics, domestic passenger aviation traffic in India increased 47% in 2022 over the previous year.
Analysts warn that the airline faces fierce competition due to the connectivity that both domestic and foreign competitors have carved out.
India, which is expected to surpass China as the most populous nation in the world, has a sizable, underserved air travel market that is dominated by low-cost airline IndiGo. However, Middle Eastern carriers like Emirates and Qatar Airways carry the majority of outgoing passenger traffic from India.
With the help of its new owners, Air India hopes to rebuild its storied status as a carrier known for its first-rate service and top-notch aircraft both domestically and abroad.
Nearly 20 aeroplanes that had been out of commission for years due to a lack of funds and components have been restored to operation. The airline has also stated that it will invest more than $400 million in the refurbishment of its entire legacy wide body fleet, which consists of 27 Boeing 787-8s and 13 777s.
Over the next five years, the goal is to capture 30% of the domestic air travel market, closing the gap with market leader IndiGo. According to the airline's new CEO Campbell Wilson, it also aspires to "multiply" its present proportion of foreign travel.
With a combined market share of 24%, Tata's four airlines—including two low-cost carriers, Air India and Vistara, a joint venture with Singapore Airlines—include two low-cost carriers.
Analysts have claimed that Air India has the potential to wrest some passengers away from competing Gulf carriers, but only after matching their fleet and service standards. The domestic conflict with IndiGo won't take place without fierce opposition from a carrier that is actively growing.
