Air India signs agreement with Airbus, Boeing for largest purchase in history

Air India Ltd. has signed agreements with Airbus SE and Boeing Co. for what could become the largest purchase of jetliners in commercial aviation history, as the carrier seeks to reinvent itself with a fuel-efficient fleet that can take on local low-cost rivals and powerful Gulf airlines like Emirates.

The airline has agreed on the outlines of the accord with the two planemakers and may formally announce the deal as early as next week, according to people familiar with the talks, who asked not to be identified because the negotiations are confidential.

Airbus stands to win about 250 orders and commitments in total, made up of 210 of the A320 single-aisle family models and 40 A350s wide-bodies, the people said.

Boeing has secured about 290 possible purchases, with 190 737 Max aircraft and the option for 50 more, as well as 20 787 Dreamliners and the same number as a possible top-up, alongside 10 777x aircraft, the people said.

The final tally could still change because of the complicated structure of the deal, which is made up of firm orders, memorandums of understanding and letters of intent, both of which are less firm than an outright purchase accord, the people said.

Officials for Airbus, Boeing and Air India declined to comment.

Air India and its parent, Tata Group, spent months negotiating the massive transaction, which should allow the carrier to upgrade service and reliability while lowering fuel costs. 

It’s also an attempt for the storied airline, founded under Tata in the 1930s, to win back traffic from Gulf rivals such as Emirates or Qatar Airways, which have built a business model ferrying Indians to the US and Europe via their huge hubs in Dubai and Doha.