Indian airline Air India on Tuesday signed a giant letter of intent to acquire 250 planes from Airbus to meet the expected growth of the huge Indian market.
This contract must quickly be coupled with another similar order for the benefit of Boeing, according to press information.
The leaders of Airbus and the Tata group, owner of the company, announced the agreement during a ceremony by videoconference, in the presence of Indian Prime Minister Narendra Modi and French President Emmanuel Macron, on the occasion of the AeroIndia exhibition. in Bengaluru.
The Indian national company, privatized last year, has ordered 210 A320neos and 40 A350 jumbo jets, providing the European aircraft manufacturer with several months of production.
The amount of the transaction has not been disclosed, but the last catalog price made public by Airbus in 2018 – never applied due to the discounts granted – values it at more than 36 billion dollars.
Negotiated for almost two years, this intention to order, which must soon be concretized by first installments to become a firm order, also includes a “significant number of options” for additional aircraft as Air India develops for become “a world-class company”, according to Shri N. Chandrasekaran, the boss of the Tata group.
“Our ambition for the country is to produce commercial aircraft there in the future,” he added.
“This important agreement not only testifies to the steady deepening of relations between India and France, but also to India’s successes and expectations in the civil aviation sector,” said Indian Prime Minister Narendra. Modi.
The European aircraft manufacturer already has an engineering center in the country and obtains certain aircraft components from Indian suppliers, recalled its president Guillaume Faury for whom “India is at the dawn of a revolution in international air transport”.
– Third world market –
“There is a deep commitment in France to provide the most efficient technologies available to India and to be part of your + Made in India + strategy”, insisted the French president, while British Prime Minister Rishi Sunak s A press release welcomed an agreement that would help create jobs in the United Kingdom, where certain aircraft components such as the wings or the Rolls Royce engines of the A350 are manufactured.
This letter of intent marks a win-back operation for Air India, which currently operates a fleet of 115 aircraft and had not purchased new planes since 2006.
Nationalized in 1953, the company had been supported by successive Indian governments which had injected 15 billion dollars until 2009 without preventing its decline in the face of the explosion of low-cost companies in the subcontinent. The government ended up selling Air India to Tata, a tea and steel conglomerate, for $2.4 billion.
Since taking control in January 2022, Tata has intended to renew the fleet of the national carrier to meet the expected growth of the Indian market and capture part of the long-haul traffic at the expense of the Gulf companies. These provide the link between the large Indian diaspora and their country of origin.
The company remains the country’s leading carrier on international lines but only had a market share of 8.7% on domestic lines, outpaced in particular by the low-cost company IndiGo, which alone captured 56. %, according to DGCA, Indian Civil Aviation.
Its boss Campbell Wilson is aiming for a 30% market share in the Indian domestic market over the next five years and plans to open more international routes.
India is the world’s third-largest air transport market and, according to Airbus forecasts, its air traffic is expected to grow at an average annual rate of 6.6% over the next two decades, a rate almost twice as high as the world average.
The number of passengers transported in India should therefore increase from 165 million in 2019 to 641 million in 2041, according to forecasts by the European aircraft manufacturer.