Air India orders 250 Airbus jets as air travel demand swells

Air India's owner said Tuesday that the carrier is buying 250 Airbus passenger jets, a mammoth order underlining the surging demand for air travel fueled by the country's swelling middle class.

The airline is buying 40 wide-body A350 aircraft and another 210 narrow-body A320neo planes, Tata Sons Chairman Natarajan Chandrasekaran said in a videoconference with Indian Prime Minister Narendra Modi and French President Emmanuel Macron.

The Toulouse, France-based plane maker did not disclose financial terms of the deal, which could be worth tens of billions of dollars.

“Today is a historic moment for India, for Air India and for Airbus,” Airbus CEO Guillaume Faury said in the video call. The size of the order “demonstrates the appetite for growth in the Indian aviation industry. It's the fastest growing in the world."

Air India, India’s largest international carrier and second-largest domestic carrier, is seeking to reinvent itself by expanding its operations and modernizing its fleet. The new jets will help Tata compete against India’s dominant carrier, IndiGo.

Chandrasekaran said the A350s will be used to "fly all ultra long distance across the globe." Single-aisle A320s are typically used on short-haul routes. He said the airline has “significant options” to increase its order.

Tata Sons, India’s oldest and largest conglomerate, regained ownership of the debt-laden national carrier last year. The Tata Group pioneered commercial aviation in India when it launched the airline in 1932. It was taken over by the government in 1953.

Modi and Macron applauded the deal, with both saying it's a sign of the strengthening “strategic partnership" between their countries.

“India is going to be the world’s third-largest market in the aviation sector," Modi said. Over the next 15 years, it's estimated that India will need more than 2,000 aircraft and “today’s historic announcement will help in meeting this growing demand," he said.

Macron called the deal a “new success” in the strategic partnership between India and France and an opportunity to “develop new areas of cooperation with India."

Tata is integrating Air India with Vistara, which it jointly runs with Singapore Airlines, and with Air Asia India, which it runs with Malaysian discount operator Air Asia.