Tata Sons-owned Air India’s ‘historic’ order of 470 aircraft from French aerospace major Airbus and U.S. aircraft maker Boeing will be at a list price of $70 billion, chief executive officer Campbell Wilson said in a press briefing on Monday. The airline plans to fund the order with a combination of resources such as internal cash flow, shareholder equity, and sale-and-leaseback of aircraft amongst others, Wilson added.
Earlier this month, Air India scripted history by announcing to buy 470 aircraft—250 from Airbus and 220 from Boeing—for a total value of $80 billion, which is the largest order by any single carrier. The airline also has the option to buy 370 more aircraft. With this, the full order of 840 planes is bigger than the total operating fleet of all Indian carriers combined currently. The Air India-Boeing pact comprises the order for fuel-efficient planes i.e. 190 737 MAX, 20 787 Dreamliner, and 10 777X airplanes. The agreement includes options for 50 additional 737 MAXs and 20 787-9s. Boeing had said earlier the order will not only be the largest Boeing order in South Asia but also a historic milestone in the aerospace company's nearly 90-year partnership with the carrier.
Regarding the merger of Air India and Vistara, Wilson said the merger is in the first phase and awaiting approval from the competition commission of India. After this, the merger will move to the second phase for approval by the Directorate General of Civil Aviation (DGCA). Wilson said the Tata group intends to end up with one full-service airline and one low-cost airline.
In November last year, Singapore Airlines and Tata Sons signed an agreement to merge Vistara with Air India as a part of the Tata group’s strategy to consolidate its aviation businesses under one umbrella. Along with the merger, Singapore Airlines will infuse ₹2,058.5 crore into Air India, which will give it a 25.1% stake in an enlarged Air India group. The merger is expected to be completed by March 2024, subject to regulatory approvals.
Last week, Air India announced the airline will hire 900 pilots and 4,200 cabin crew trainees as the airline inducts new aircraft to expand its operations. The cabin crew will be recruited from across the country and will undergo a 15-week training programme. The coaching will include extensive classroom and in-flight training at the airline's facility in Mumbai. Air India has hired over 1,900 cabin crew and 285 pilots between April 2022 and February 2023.
On January 27 last year, the soft-to-software conglomerate took over the management and control of Air India from the government, after 69 years. Through the divestment, the government had sold off its 100% stake in the state-owned national airline, including Air India's 100% shareholding in Air India Express Ltd and 50% in Air India SATS Airport Services Private Ltd. Tata Group made the winning bid at ₹18,000 crore to bag the airline in October 2021. The airline is now handled by Tata Sons' wholly-owned, newly-formed subsidiary Talace. In order to bolster its presence in the domestic aviation industry, Tata's Air India acquired a 100% stake in AirAsia India (AAI) in November last year. AirAsia India was a joint venture between Tata Sons and AirAsia Group, with the former owning an 83.67% stake, while the latter owned the remaining 16.33% stake.
