Air-India buys 68 Boeing aircraft

Final deal size likely to be $8.1 bn.

National flag carrier Air-India today signed an agreement with Boeing of the US to purchase 68 aircraft.

Though the value of the order was not disclosed, the current list price of the aircraft is well over $11 billion. However, it is understood that the final amount could be $8.1 billion following several rounds of negotiations with Boeing. Today's agreement comes after the recent go-ahead from the government.

"Boeing has also committed to invest in a regional maintenance, repair and overhaul (MRO) base and a pilot training facility in the country with a total investment of $185 million," Air-India Chairman and Managing Director V Thulasidas said.

This will be the single largest order by the airline since it commenced operations in 1953 under the Air Corporations Act.

The aircraft are scheduled for delivery by November this year. Air-India's order comprises 23 777s (including eight 777-200LR Worldliners and 15 777-300ERs) and 27 787-8 Dreamliners.

Air-India Express, a wholly owned subsidiary of Air-India, will receive 18 next-generation 737-800s. The airline will use this order to support both fleet renewal and expansion plans. Air-India currently operates a fleet of 11 747-400s, two 747-400 Combis, two 747-200s, two 747-300 Combis, three 777-200ERs and 21 Airbus 310-300s.

The 777s will replace the airline's current fleet of 747-200s aeroplanes, while the 787-8 Dreamliner will replace its ageing A310 fleet.

Thulasidas said the positive economics of the 777-200LR, 777-300ER and 787 Dreamliner would offer Air-India operational cost savings and the flexibility to serve new, ultra long range non-stop routes such as New Delhi-New York and Mumbai-San Francisco.

Union Civil Aviation Minister Praful Patel said the deal was the largest in the Indian aviation history and the entire process of acquisition was transparent.