Tata Group-owned Air India places order for 85 planes with Airbus

Tata Group-run Air India (A-I) has placed an order for 85 planes — 55 A320neo, 20 A321neo, five A350-900 and five A350-1000 planes — with European aircraft manufacturer Airbus, aviation industry sources said on Thursday.

In its monthly orders and deliveries report published on Wednesday, Airbus disclosed that an "undisclosed" customer had placed an order for 85 aircraft. While the aircraft-maker did not reveal the name of the customer, sources confirmed on Thursday that it was Air India.

In February last year, Air India placed the world's second-largest aircraft order — 250 planes with Airbus and 220 with Boeing. At the time, the airline's Chief Commercial and Transformation Officer (CCTO), Nipun Aggarwal, revealed that the airline had secured "options" to expand the order by an additional 370 planes. This brought the total potential order to 840 planes, with 470 firm orders and 370 as options.

The airline has now exercised some of its Airbus options, sources noted, and is also considering placing an order using the Boeing options. The airline has exercised these options to ensure a solid aircraft supply in future. Airbus and Air India did not respond to Business Standard's requests for statements on this matter.

In February 2023, Air India's firm order with Airbus comprised 70 A320neo, 140 A321neo, 20 A350-900 and 20 A350-1000 planes. Out of these, Airbus has delivered six A350-900 planes. Sources mentioned that the deliveries of A320neos are expected to start from 2027 onwards.

Air India's expansion of the order is coming at a time when Airbus has been forced to cut its annual production target due to supply chain issues. Owing to shortage of engine and other components, Airbus had in June reduced its 2024 delivery target from about 800 to 770 airplanes. Moreover, the company had in June postponed its goal of producing 75 narrow-body aircraft per month from 2026 to 2027.

Airbus Chief Executive Officer (CEO) Guillaume Faury, who was in Delhi on Monday, stated that the "main" challenge Airbus faces today is scaling up aircraft production, and India can help "debottleneck" this process by becoming a more integral part of the supply chain.

Asked about his plans to set up a final assembly line (FAL) for commercial planes in India, Faury replied that FAL is just the tip of the iceberg and it is not a "limiting factor". He mentioned that the "limiting factor" is the supply of large equipment, which has been affected due to fragile supply chains at the lower end of the pyramid.