Air India is planning to order as many as 300 narrow-body jets, citing sources, news
agency Bloomberg reported on Monday. This deal could be one of the largest orders in
commercial aviation history as the formerly state-run airline looks to overhaul its fleet
under new ownership. In today's video, we are going to talk about “Massive
Airbus order.” So without any further ado, Let's begin.
Under its new ownership, Air India might buy Airbus SE A320neo jets, Boeing Co.'s 737 Max,
or a mix of both, according to sources. The order of 300 737 Max-10 airplanes is worth
around $ 40.5 billion without bulk discounts. The manufacturing and delivery of this order
by Air India might take years or decades to complete.
Airbus created 50 narrowbody planes in one month, intending to increase production to
65 and 75 per month, likely to be done by 2023-2025, as cited in the Mint. Winning this
contract would constitute a major victory for US-based aircraft manufacturer Boeing,
in what is the world's fastest-growing commercial aviation market.
So far, European manufacturer Airbus has been the dominant player in the Indian market.
IndiGo, operated by InterGlobe Aviation Ltd., is the world's largest customer for the European
manufacturer's best-selling narrowbodies, ordering more than 700, and others including
Vistara, Go Airlines India Ltd., and AirAsia India Ltd. fly planes from the same family.
In addition to the 300 narrowbodies, the Tata Group is close to clinching a deal with Airbus
for 50 A350-900 aircraft. Air India sent a message to its pilots earlier this month,
asking them to volunteer for A350 training: “Air India is in the process of augmenting
its existing fleet with the A350 type of aircraft with the Entry into Service. You are requested
to give your acceptance of your willingness to be taken up for Conversion training on
the A350 aircraft,” It would only take around six months for Air
India’s pilots to be trained for the A350, as the aircraft shares a similar cockpit design
with the A320. Industry sources say the airline could be operating the new aircraft as early
as the first half of 2023. "Air India is clearly reorganizing itself
under the very able stewardship of the Tatas and as such, it is very natural that they
contemplate an investment in new fleets, new airplanes if only to regain more sovereignty,
more market share, for an Indian carrier in the international market," Scherer said.
Air India has not bought a single aircraft since 2006 when it had placed orders for purchasing
111 aircraft - 68 from the US-based aircraft manufacturer Boeing and 43 from European aircraft
manufacturer Airbus. A wide-bodied plane like Airbus A350 has a bigger fuel tank that allows
it to travel long distances such as India-US routes.
“This order presumably involves new methods of financing to play out in the right manner,
including factoring in macroeconomic trends — notably the fluctuating rupee and rising
inflation,” said Satyendra Pandey, managing partner of aviation advisory firm AT-TV. “Some
airlines have placed voluminous orders only to find that they are unable to line up financing
at favorable terms. While it is not an outcome that one envisions and certainly not with
a group such as the Tatas, nevertheless it has to be planned for.”
A massive narrowbody order remains up for grabs for both rival planemakers, with no
firm indications of which manufacturer AI might choose. In India, the price of aviation
turbine fuel (ATF) on domestic routes can vary from 25 percent of total operational
costs for a single-engine aircraft to up to 45 percent for a large passenger jet.
The airline is also reported to be scouting for a suitable aircraft to operate ultra-long-haul
flights from India. The country is estimated to require 2,210 new aircraft over the next
20 years, according to Airbus’ India Market Forecast released in March. That may comprise
1,770 new small and 440 medium and large aircraft. On international routes, India has only about
one-tenth of the widebody fleet found in equivalent markets, depriving homegrown carriers of a
larger share of the profitable long-haul routes currently dominated by foreign airlines. However,
in the high cash burn aviation industry, carriers need to also watch out for absorption risks
while planning fleet expansion. Now that we've come to the end of this video,
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