Air India buys 85 Airbus jets, eyes more Boeings, sources say

By Tim Hepher and Aditi Shah

PARIS/DELHI (Reuters) -Air India has continued a dramatic bid to recapture a place among top carriers by placing a new order for 85 Airbus jets and now eyes more Boeings on top of an historic purchase of almost 500 jets from the two planemakers, industry sources said.

The Airbus order emerged in a routine industry update as the national carrier mourned the death of the former chairman of parent Tata Group, business and aviation pioneer Ratan Tata.

Airbus said late on Wednesday an unnamed customer had placed an order for 75 A320-family jets and 10 long-haul A350s - a deal worth $6.3 billion after typical discounts, according to Cirium Ascend data. Airlines frequently keep their names under wraps to avoid revealing their fleet strategies to competitors.

Three industry sources said that Air India was the airline behind the order, which involves exercising options and comes barely a year after it ordered 250 new jets from Airbus and 220 from Boeing to revive its status with an all-new fleet.

Two of the sources said Air India was also in talks for a potential top-up order from Boeing.

Air India did not immediately respond to a request for comment on the Airbus part of the follow-on negotiations, first reported by Bloomberg News.

Airbus, whose monthly order update was published shortly before Tata announced the death of its former chairman at the age of 86, declined comment on any talks with customers.

Boeing did not immediately reply to a request for comment.

Founded in 1932 by the late J.R.D. Tata, Air India was once among the world's top airlines.

Ratan Tata took over from J.R.D. Tata as chairman of the conglomerate in 1991 and served for over 20 years. He was given a state funeral on Thursday.

'CONSIDERABLE EFFORT'

The Tata family patriarch had been a driving force behind the conglomerate's bet on airlines, striking a joint venture with AirAsia before retiring as chairman and playing a pivotal role in establishing Vistara, Tata Group's full-service carrier in the partnership with Singapore Airlines. Flying and fast cars were two of his biggest passions and the group sought to snap up Air India in an earlier privatisation process which was later aborted by the government.

In 2021, he cheered the return of Air India to Tata's fold under a new process but acknowledged the challenge of rebuilding the airline virtually from scratch after years of decline.

"While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata Group's presence in the aviation industry," Tata said on X.

Now, the creaking state carrier is in the midst of a multi-billion-dollar revamp in the face of established competition.

Last year, it agreed to roughly split the then-record order for a total of 470 jets between Airbus and Boeing, with neither planemaker having the capacity to sweep the whole order.

Chief Commercial and Transformation Officer Nipun Aggarwal, who led the secret London negotiations, was later quoted as saying Air India had also negotiated a total of 370 options and purchase rights from Airbus and Boeing on top of the main order.

Air India said last year that it still had options for 70 more Boeing jets but did not publish a breakdown for Airbus.

India's largest airline, IndiGo, placed its own record order for 500 jets last year.

Analysts say both airlines face delays for their jets.

Consultancy CAPA India said on Thursday it was sticking close to a forecast of 6% to 8% domestic traffic growth in the year to March 2025, but expressed concerns about geopolitical tensions, higher oil prices and worsening supply disruption.

(Reporting by Tim Hepher, Aditi Shah; Editing by Jan Harvey and David Evans)