Monday, May 27, 2024

Tata Group’s Massive 470 Aircraft Order Comes Amidst Indian Aviation Sector Growth

By Staff Correspondent

Tata Group-owned Air India has placed two massive aircraft orders totalling 470 planes with Boeing and Airbus. The deal, with an estimated value of $70 billion to $80 billion, surpasses American Airlines’ 2011 order for 460 planes as the largest airline order made in one go globally. The order is also the largest by an Indian carrier, exceeding IndiGo’s 2019 purchase of 300 aircraft.

According to an Air India official’s social media post, the airline has the option to purchase an additional 370 planes, taking the total to 840. Boeing has said the agreement includes options for 20 787-9s and 50 more 737 MAX aircraft, making it Boeing’s largest order in South Asia once completed. Overall, the deal is among the largest in commercial aviation history.

The order comes as India’s aviation industry is experiencing significant growth, with the third-largest domestic aviation industry in the world, according to the All India Association of Industries (AIAI). The International Air Transport Association (IATA) predicts that by 2024, India will have the world’s third-largest domestic and international air travel market. IATA also projected that Indian air travel will increase by 262% over the next 20 years, resulting in an additional 370.3 million passenger trips by 2037.

Boeing’s ‘2022 Commercial Market Outlook (CMO) for India’ published on the same day as the Air India agreement projects a long-term passenger growth rate of approximately 7% annually until 2041. Although foreign networks are growing, India’s domestic passenger traffic has already returned to 98% of its pre-COVID-19 levels. As a result, Indian airlines plan to increase supply by 7% in the first half of 2023 compared to 2019.

On 29 November, 2022, Singapore Airlines and Tata Sons announced an agreement to merge Air India and Vistara, with SIA receiving 25.1% ownership in the new company and investing Rs 2,058.5 crore ($250 million) in Air India. The merger expands the full-service airline’s fleet and boosts its local and international operations, with Tata acquiring a fleet of 218 aircraft through the Vistara transaction, making Air India the largest international airline in the nation. However, IndiGo remains the domestic sector leader.

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