Air India mulls historic order for 500 jetliners worth $100bn
What's the story
Tata Group is busy carving out an exciting future for the newly acquired Air India. The airline is about to enter a new phase of its renaissance. According to Reuters, Air India is about to place a historical order for as many as 500 jetliners. This order will become the biggest by a single airline, eclipsing American Airlines' decade-old record of 460 jetliners.
Context
Why does this story matter?
There was a time when the name Air India was synonymous with luxury travel and great service. However, over the years, India's national carrier's reputation took a hit due to financial difficulties and increased competition. Tata Group has been making moves to bring Air India back to its past glory. An improved fleet of jetliners is certainly a step in the right direction.
Order
The jetliners will come from both Airbus and Boeing
Air India's landmark order to expand its fleet will be for jetliners from both Airbus and Boeing. According to Reuters, the deal will include up to 400 narrow-body jets and 100 or more wide-bodies, including several Airbus 350s and Boeing 787s and 777s. The order will be worth over $100 billion. Even after significant discounts, it would cost tens of billions of dollars.
Meaning
Air India wants to mount a challenge on different fronts
Looking at the deal, it is clear that Tata Group wants to fight a battle on different fronts. It aims to challenge foreign carriers such as Emirates by winning back a significant amount of traffic to and from India. It also wants to take on domestic rival Indigo by capturing a big chunk of international and domestic air traffic.
Vistara
Tata Group recently announced the merger of Air India, Vistara
Air India's landmark order for jetliners comes in the backdrop of the recently concluded deal between Tata Group and Singapore Airlines. The two agreed to merge Vistara and Air India. That deal will give the enlarged Air India a fleet of 218 aircraft, making it India's largest international carrier. It still remains second in the domestic market behind market leader Indigo.