Air India to purchase 500 planes worth over $100 billion
11 Feb 2023 16:59:33
New Delhi, Feb 11: In an effort to rebuild itself under its new owners, Air India has signed a massive contract for roughly 500 new planes worth more than $100 billion. Reportedly, this might be the airline's single-largest purchase ever as Air India is in the process to overhaul itself under the Tata Group with a fleet that is fuel-efficient.
Air India will purchase 250 airbus aircraft, including 210 single-aisle A320neos and 40 wide-body A350s.
Additionally, the airline aims to purchase 220 Boeing aircraft, including 190 Boeing 737 MAX narrowbody aircraft, 20 Boeing 787 widebodies, and 10 Boeing 777Xs. While the airline reached an agreement with Boeing on January 27—one year after Tata reclaimed ownership of the erstwhile state-run carrier—Airbus and Air India finalized their agreement on February 10. The agreement is noteworthy since it occurs while the current mergers of Vistara and Air India, which previously operated as AirAsia India and Air India Express, respectively, proceed. The integrated Air India aims to take more than 30% of the market on domestic and international flights. The acquisition of Air India by the Tata Group last year is one of PM Narendra Modi's government's most well-known privatization agreements. With a reserve price of Rs. 12,906 crores, Tata Group placed the winning proposal for Rs. 18,000 crores as the airline's enterprise value.
The offer included keeping the debt of Rs. 15,300 crores while paying down Rs. 2,700 crores. The deal was a bold attempt to turn around the long-struggling, loss-making carrier that was heavily indebted.