The order favored Boeing because the aircraft manufacturer could guarantee immediate delivery of 50 aircraft previously destined for China Southern, which would take delivery of 103 Max aircraft.
Airbus can win part of the order
“Fifty of those aircraft will be delivered to Air India immediately, from March next year,” said one of the persons. “Air India is hungry for planes because they have an aggressive expansion plan.” The order will likely be signed in the coming weeks, the person said.
Airbus, on the other hand, has not been able to promise deliveries of the A320 Neo before 2025. However, Airbus could still win some of the narrow body orders from the airline that is likely to have more than 150 such aircraft.
“Air India is taking advantage of the situation because aircraft are immediately available with Boeing, but Airbus is still counting on a share of the order and negotiations are ongoing,” said a second person who was aware of the plans.
A Boeing spokesperson declined to comment on future deals. Air India did not respond to questions.
Boeing has been unable to deliver 737 Max jets to its Chinese customers because the country’s aviation regulator failed to re-certify the plane after it was grounded in 2019 after two crashes. A frosty relationship between the US and China has made supplies even more uncertain as Boeing now looks to remarket the plane.
Since acquiring Air India early this year, Tata has engaged with aircraft manufacturers as part of its fleet renewal. CEO Campbell Wilson said Air India plans to expand its fleet and global network, aiming to increase its market share to 30% over the next five years on both domestic and international routes.
Tata Sons is in the process of consolidating its aviation business. AirAsia India and Air India Express will be merged into one low-cost unit and Vistara will be absorbed into Air India to create one full-service airline.
Although the order is placed by Air India, the aircraft can also be assigned to its low-cost unit. Air India Express currently operates 24 737 Max aircraft while AirAsia India operates 28 Airbus A320 Neo jets.
The new aircraft will help the airline’s plans to serve short-haul destinations within a four- to five-hour range as it seeks to compete with IndiGo, which currently holds more than 50% of the domestic market. In addition to ordering new aircraft, the airline is also adding 36 wide-body aircraft on short-term leases by 2023.