Boeing Co. is closing in on an order for as many as 200 of its 737 Max jets from Air India Ltd.’s new owner Tata Group as the two sides race to wrap up talks before the year-end holidays, according to people familiar with the matter.
The final deal is expected to include 40 to 50 Max aircraft that were built for Chinese carriers but never delivered due to an extended grounding of the US jet and heightened trade tensions, some of the people said, asking not to be identified because the discussions are confidential.
Broader negotiations over Air India’s fleet makeover have heated up in recent weeks as the management team eyes sweeping changes, including refreshing the carrier’s long-haul fleet with Airbus SE A350s and Boeing’s 787 Dreamliner jets and leasing used Boeing 777s to serve on international routes. The talks are complex, involving multiple parties including financiers and engine makers, and could drag into next year, the people cautioned.
With its large and increasingly mobile population, India has become a critical market for planemakers like Boeing and Airbus, even more so given China’s difficulties emerging from Covid. The country’s dominant carrier is IndiGo, the world’s biggest customer for Airbus’s best-selling A320neo family of jets, making it crucial for Boeing to build a better presence in the nation.
Bloomberg News previously reported that Tata, which bought Air India back from the government for 180 billion rupees ($2.2 billion) last year, was considering orders for as many as 300 narrow-body and 50 wide-body, or twin aisle, planes. Boeing is now offering several 737 Max jets once slated for Chinese customers to Air India as the planemaker tries to offload some of the roughly 140 aircraft it’s currently not allowed to deliver, Bloomberg reported in October.
Air India, established by Tata’s founder nearly a century ago before being nationalized in the 1950s, hasn’t made a profit in 15 years. It’s now in the early stages of a transformation plan intended to lift its India market share to 30% from about 9%. The carrier said last week it will invest more than $400 million to refurbish its wide-body jets as it tries to spruce up its image.
Tata is also consolidating its four airline units, bringing its Vistara, Air India Express Ltd. and AirAsia India ventures under the national carrier’s brand. The order being considered includes taking some aircraft on lease with options to buy later, the people said.
Reuters reported earlier that Air India may order up to 500 jetliners from Airbus and Boeing, citing people in the industry it didn’t identify.