Air India in talks for major new narrow-body jet order, sources say

By Tim Hepher, Aditi Shah and Rajesh Kumar Singh

NEW DELHI (Reuters) -Tata Group's Air India is in talks with Airbus and Boeing for a major new aircraft order including some 200 extra single-aisle planes, topping up a mammoth deal in 2023 as the former state carrier pursues a multi-billion-dollar revamp, industry sources said.

The order discussions, which two of the sources said could involve hundreds of airplanes in total spread across various sizes, expand on previously reported discussions for a further batch of large wide-body aircraft, they told Reuters.

In those talks, Boeing is edging forward as the front-runner to sell more of its 777X jets, two of the sources said.

Air India, Boeing and Airbus all declined to comment.

Word of a potential new blockbuster order from India's flag carrier emerged as global airline bosses gathered in the world's fastest-growing aviation market for a Delhi industry summit to be addressed by Indian Prime Minister Narendra Modi on Monday.

Air India placed a then-record order for 470 planes from both suppliers in 2023 and another 100 Airbus jets last year.

The back-to-back plane orders come at a time when aircraft manufacturers are scrambling with supply chain issues leading to severe delays in aircraft delivery and a looming jet shortage.

Getting new planes is crucial for Air India, which has suffered from years of under-investment under government ownership and is now undertaking an ambitious modernisation plan to recapture market share lost to global rivals.

One of the sources said the potential new narrow-body jet order provisionally involved 200 aircraft, while two others estimated the volume in the hundreds.

The timing of any deal was not immediately clear and one source said pricing could be a stumbling block as Air India seeks to emulate deals by India's largest carrier IndiGo, which announced new partnerships and a top-up Airbus order on Sunday.

Multi-billion-dollar aircraft orders typically take months of closely held talks to negotiate, with any Boeing and Airbus components usually being announced separately.

India's aviation market is expanding at some 7% a year, according to Airbus forecasts. But analysts say its growth remains hampered by weak infrastructure, especially as it looks to connect hinterlands to bigger cities.

On the eve of the airline meeting in the Indian capital, the International Air Transport Association of 300 global carriers said the country's airlines were poised to demonstrate continued rapid growth, clouded by expensive fuel costs and high taxes.

(Additional reporting by Shivansh Tiwary, Nandan Mandayam; Editing by Elaine Hardcastle and Sophie Walker)