Air India announced Tuesday that it will purchase 250 Airbus aircraft as part of an agreement to revamp the former national carrier, which has been a massive drain on the public purse for decades.
In an ambitious effort to gain domestic market share and turn Indian airports into major hubs for international travel, the airline would buy 210 narrow-body A320neo jets and 40 long-haul A350 aircraft.
“We are undergoing a major transition,” said N Chandrasekaran, chairman of Air India, while announcing the agreement with French President Emmanuel Macron and Indian Prime Minister Narendra Modi in virtual attendance.
“One of the most critical things is to have a contemporary fleet that can handle all routes.”
Tata Group launched Air India in 1932, and the Indian government purchased a majority interest following independence.
By the end of the century, however, the venture was failing to compete with Gulf carriers and low-cost airlines, was starved of investment, and was piling up billions of dollars in losses that impacted on the public purse.
Tata, which is also chaired by Chandrasekaran, finally acquired it back a year ago in a $2.4 billion deal.
“Today is a momentous day for India, Air India, and Airbus.”said Airbus CEO Guillaume Faury
“The enormity of the Air India order… indicates the Indian aviation industry’s thirst for growth,” he added.
Air India is still the country’s largest international carrier, but its domestic market share in September was only 8.6 percent.
By the end of 2027, the carrier hopes to have a 30 percent domestic market share while extending its fleet to serve more foreign routes.
In the upcoming 15 years, India will require more than 2,000 aircraft, according to many estimations, stated Modi. “This unprecedented disclosure will assist in meeting this rising need.”
Macron stated that the agreement emphasised the connection between Paris and New Delhi.
He said, “I want to let everyone know that for me, this extremely important contract and this achievement today is one of the milestones in the comprehensive strategic and cordial alliance we have between India and France.”
Campbell Wilson, a New Zealander, was chosen as Air India’s first foreign CEO in May of last year with the goal of streamlining operations and restoring profitability.
However, the airline was slammed for its handling of a Wells Fargo executive who was permitted to exit as usual after reportedly peeing on an elderly woman aboard a trip from New York late last year.
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