India continues to make waves at the Paris Airshow as Air India, the national carrier, finalized a major plane deal of 470 planes from leading aircraft manufacturers Airbus and Boeing. This agreement, originally outlined in February, surpasses previous records as the major plane deal ever in terms of the number of aircraft involved. However, the Indian airline IndiGo stole the spotlight on the first day of the airshow with its order for 500 Airbus narrowbody jets.
India Solidifies Its Position
By finalizing this major plane deal, Air India solidifies its position in the aerospace industry’s order backlogs, transforming the preliminary agreement into firm orders. While Air India estimates the deal to be worth $70 billion based on list prices, industry analysts expect significant discounts on such large orders, typically reducing the actual cost by at least half.
Indian airlines have been striving to keep pace with the world’s fastest-growing aviation market, serving a large population, resulting in shattered industry records. However, manufacturers face challenges in meeting output goals due to supply chain disruptions. Concerns have been raised by some analysts regarding the potential for airlines to over-order jets in their quest to capture the same pool of passengers.
Air India’s major plane deal includes 250 planes from Airbus, comprising 210 A320neo and A321neo narrowbody jets, along with 40 A350 widebodies. Boeing’s portion consists of 190 narrowbody 737 MAXs, in addition to 20 787 Dreamliners and 10 777X widebodies.
Moving toward an efficient future
Campbell Wilson, CEO of Air India, expressed enthusiasm about the ambitious fleet renewal and expansion program and also major plane deal, stating that the airline will operate the most advanced and fuel-efficient aircraft within five years. This buying spree by Indian airlines reflects the strong global demand for civilian aircraft as travel rebounds from the pandemic, and airlines prioritize more fuel-efficient models to reduce their environmental impact.
While the demand for short and medium-haul narrowbody jets has been particularly high, Rolls-Royce, an engine manufacturer, noted that the market for long-haul widebodies is also experiencing a significant rebound. However, aircraft manufacturers and suppliers remain concerned about their ability to meet the surging order volumes due to rising costs, parts shortages, and a shortage of skilled workers.
Air India’s revitalization under the Tata conglomerate seeks to capitalize on India’s expanding base of air travelers and its large diaspora, which has predominantly relied on foreign carriers like Emirates. This mega-order will enhance Air India’s competitive position against its budget rival, IndiGo, which currently holds a majority share of the Indian market and enjoys a strong presence in regional flights.
Ethiopian Airlines Announces Orders
In other news from the Paris Airshow, Ethiopian Airlines announced its imminent order for approximately 130 Airbus and Boeing planes following the event. Leasing company Avolon finalized its order for 40 Boeing 737 MAX 8 planes, while Philippine Airlines confirmed its order for nine Airbus A350-1000 widebody jets. Additionally, Qantas confirmed a Reuters report by finalizing a deal for nine Airbus A220-300s.