India's national flag carrier has gone big for Boeing. (Photo RAVEENDRAN)
AFP via Getty ImagesPresident Joe Biden announced that Air India has agreed to purchase 220 Boeing jets valued at $34 billion, with an option for an additional 70 jets, totaling 290 airplanes for a total of $45.9 billion at list price.
The jumbo deal is Boeing’s third biggest sale of all time in dollar value and second of all time in quantity. The initial order includes 190 Boeing 737 MAXs, 20 Boeing 787s, and 10 Boeing 777Xs.
The deal, first reported by Reuters in December, was not announced officially by the Biden administration until Tuesday, following last month’s inaugural launch of the U.S.-India initiative on Critical and Emerging Technology (iCET) to expand the cooperation between the governments, businesses, and universities of the two countries.
“This purchase will support over one million American jobs across 44 states, and many will not require a four-year college degree,” President Biden said. “This announcement also reflects the strength of the U.S.-India economic partnership. Together with Prime Minister Modi, I look forward to deepening our partnership even further as we continue to confront shared global challenges—creating a more secure and prosperous future for all of our citizens.”
Air India has also agreed to purchase 250 planes from France-based Airbus, including 210 single-aisle A320neos and 40 widebody A350s.
The massive order is a sign of Air India’s strategic plan to recapture lost prestige and market share ceded in recent years to competitors with younger planes.
In 2022, Air India had just 8.7% of domestic market share, a record low and far below owner Tata Group’s stated goal of capturing nearly a third of the domestic market.
IndiGo, a low-cost carrier founded in 2006, was the runaway leader with 56.1% of India’s domestic market share, followed by Vistara at 9.2% and Go First at 8.8%. Air India and SpiceJet tied for fourth place with 8.7%, according to data from India’s Directorate General of Civil Aviation (DGCA).
Boeing shares were up 2% Tuesday morning.
