Boeing will invest $24 million in India to establish a logistics centre as part of a large aircraft sale.

Boeing, a US-based producer of airplanes, plans to invest around $24 million in India to set up a logistics hub for aviation parts, according to Salil Gupte, head of the business.

Due to a significant aircraft order placed by Air India-owned by the Tata Group, Boeing plans to increase its presence in the country. The former state-run airline of India, Air India, is expected to make a huge announcement this week on a deal to buy about 500 aircraft from Boeing and Airbus for a total of more than $100 billion at list prices. The 220 aircraft that makeup Boeing’s share are split between 190 737 MAX narrowbody aircraft, 20 787 widebodies, and 10 777X aircraft.

India’s market share for Boeing

Gupte stated that India is currently the third-largest domestic aviation market in the world and would soon overtake China as the third-largest market globally, but he would not comment on any specific customer orders. He stated that both widebody and narrowbody aircraft will have a tonne of chances because India is one of the largest markets for civil aviation worldwide. The company anticipates that the new facility would improve airline access to aircraft while reducing flight cancellations and groundings brought on by maintenance issues.

The choice was made after rival Boeing, and challenger SpiceJet both placed orders for single-aisle aircraft, helping Boeing overtake rival Airbus in the Indian market. An aircraft manufacturer estimates that during the next 20 years, India’s carriers will need 2,200 new aircraft, the majority of which will be narrowbody aircraft. Boeing will likely concentrate on that market, according to Gupte. “As the middle class grows and India leads the world in economic advancement, an increasing number of people will take to the skies. As a result, he continued, we must make sure that our customers have obtained the narrow-body aircraft they need to serve this market.

Joe Biden and PM Modi spoke on the phone following the Air India-Boeing agreement.

In a telephone conversation with US President Joe Biden on Tuesday, Indian Prime Minister Narendra Modi hailed the historic agreement between Air India and Boeing as “a shining example of mutually beneficial co-operation.” As the United States and Europe recognised the strengthening political and commercial connections with India, Air India revealed the agreements for a record acquisition of 470 planes from Airbus and Boeing on Tuesday. This hastened the revival of the national symbol under its new owners Tata Group.

The tentative orders, which surpass previous records for any such transaction by a single airline and comprise 250 Airbus jets and 220 Boeing planes, come as Air India competes with local behemoth IndiGo to serve a country that will soon have the highest population in the world. Biden referred to the deal as “historic.” The Airbus purchase includes 210 A320neo narrowbody aircraft and 40 A350 widebody aircraft, which would be used by Air India to operate “ultra-long routes,” according to Tata Chairman N Chandrasekaran.

Boeing will supply 20 of its 787 Dreamliners, 190 737 MAX aircraft, and 10 mini-jumbo 777X aircraft. According to an Airbus official, the airline will have 495 total aircraft after leasing an additional 25 Airbus aircraft to suit short-term requirements. Modi and French President Emmanuel Macron emphasised the deal’s political and economic significance, which includes the former Indian flag bearer. The purchase announced by Air India surpasses the joint contract made by American Airlines over ten years ago, which comprised 460 Airbus and Boeing aircraft.

Following a landmark Airbus order, Air India announces a contract to purchase 220 aircraft from Boeing.

Air India said on February 14 that it has also signed a contract with American aerospace giant Boeing for the supply of 220 aircraft, after the historic Airbus deal. According to the agreement, the airline owned by the Tata group would buy 30 widebodies, including 20 Boeing 787s and 10 Boeing 777Xs, and 190 narrowbody 737 MAX aircraft. The signature of the Air India-Boeing agreement was also verified by the White House in a separate statement. It cited US President Joe Biden as stating, “This declaration underscores the strength of the U.S.-India economic alliance.”

After Air India announced at a press conference that it had signed a contract with the UK-based Airbus and Rolls-Royce for the sale of 250 Airbus aircraft, the Boeing deal was announced shortly after. The airline will purchase 40 widebody A350s with Rolls-Royce engines in addition to the 210 single-aisle A320neos. The joint order from Boeing and Airbus is the largest placed by any airline as Air India gears up for a makeover under the Tata group with a fleet that uses less fuel.

Air India will purchase new aircraft, which will have an entirely new cabin interior, in addition to its previously announced intention to refurbish its widebody B787 and B777 aircraft with new seats and in-flight entertainment systems. In addition, it was announced that the first of these upgraded aircraft will begin flying in the middle of 2024. According to the business, the acquisition from Boeing and Airbus “is a significant step in fulfilling Air India’s ambition, outlined in its Vihaan.AI transformation project, to deliver a world-class product for travellers across the world with an improved travel experience.”

India has a heart, according to N Chandrasekaran, chairman of Air India and Tata Sons. “With the addition of six new aircraft, the airline will refresh its fleet and onboard facilities while also considerably expanding its global network. This order’s extension will also provide Indian aviation professionals with unparalleled career opportunities and foster the development of the Indian aviation ecosystem “Adds Chandrasekaran.

According to prior reports, Air India plans to increase its fleet by around 90 aircraft by the year 2025, including 56 aircraft that are part of large aircraft contracts with Airbus and Boeing. These will be in addition to the airline’s already mentioned leases of 36 aircraft for the year 2022. On January 27, Air India celebrated one year as a Tata Group company. Under a government-led strategic divestiture programme, the Tatas purchased 100% ownership in both Air India and Air India Express. A merger of Vistara, a 51:49 joint venture between Tata Sons and Singapore Airlines, with Air India was also announced by the group in November. Singapore Airlines would own 25.1% of the combined company.

The company has also implemented a five-year plan called Vihaan to capture 30% of the domestic and international markets. According to the carrier’s plan, it would prioritise growing its network and fleet, rethinking its customer offering, enhancing reliability and on-time performance, and emphasising technology, sustainability, and innovation. Additionally, it is urged to make investments in the industry’s best talent.

More than 16 years ago, when Air India was formerly owned by the government, it bought new planes. The last order for 111 aircraft, worth $ 10.8 billion, was placed in 2005. Of those, 68 were with Boeing Co., and the remaining 43 were with Airbus. Air India may make the first move with a 500-jet purchase, according to last week’s report from aviation consultant CAPA, which predicted that Indian airlines could likely acquire up to 1,700 planes by 2024.

Edited by Prakriti Arora