The Daily Populous Friday June 23rd, 2023 evening edition
Authored by reuters.com and submitted by Winstonoceaniasmith

Summary Companies Air India finalises order for 470 Airbus/Boeing jets

Rolls-Royce says widebody market coming back strongly

Ethiopian Airlines expects to order about 130 planes soon

PARIS, June 20 (Reuters) - India dominated the Paris Airshow for a second day on Tuesday, as Air India finalised a huge order for 470 planes from Airbus (AIR.PA) and Boeing (BA.N).

The agreement, when sketched out in February, was the largest ever plane deal by number of aircraft. But it was surpassed on day one of the Paris show by Indian rival IndiGo's (INGL.NS) order for 500 Airbus narrowbody jets.

Finalising the deal puts it in the aerospace industry's order backlogs as firm orders. Until now, it was only a preliminary deal. Air India said it was worth $70 billion at list prices, though airlines typically get discounts on big orders worth at least half the headline price, analysts say.

Efforts by Indian airlines to keep pace with the world's fastest-growing aviation market, serving the largest population, have sent industry records tumbling even though manufacturers are struggling to meet output goals due to supply chain snags.

But some analysts have expressed concern that airlines could be over-ordering jets in pursuit of the same passengers.

Air India's deal includes 250 planes from Airbus and 220 from Boeing. The Airbus part comprises 210 A320neo and A321neo narrowbody jets and 40 A350 widebodies. Boeing's deal is for 190 narrowbody 737 MAXs, plus 20 787 Dreamliner and 10 777X widebodies.

"Our ambitious fleet renewal and expansion programme will see Air India operate the most advanced and fuel-efficient aircraft across our route network within five years," Air India Chief Executive Campbell Wilson said in a statement.

The buying spree by Indian airlines adds to signs of strong global demand for civilian aircraft as travel rebounds from the pandemic and airlines look to reduce their environmental impact with more fuel-efficient new models.

[1/5]Visitors attend the International Paris Air Show at the Paris-Le Bourget Airport, France June 19, 2023. LUDOVIC MARIN/Pool via REUTERS

Demand has been hottest for short and medium-haul narrowbody jets, but engine maker Rolls-Royce (RR.L) said on Tuesday the market for long-haul widebodies was also coming back strongly.

However, planemakers and their suppliers remain concerned about their ability to meet bulging order books amid rising costs, parts shortages and a scarcity of skilled workers.

Lars Wagner, CEO of MTU Aero Engines, said on Tuesday labour shortages and problems with the production of castings were the biggest strains in the engine supply chain.

Air India, with its maharajah mascot, was once known for its lavishly decorated planes and stellar service, but its reputation declined in the mid-2000s as financial troubles mounted.

Its renaissance under the Tata conglomerate aims to capitalise on India's growing base of fliers and large diaspora, currently mostly served by foreign rivals such as Emirates.

The mega-order will also put Air India on a stronger footing to compete with budget rival IndiGo, which has a majority share of the Indian market and a strong position in regional flights.

Elsewhere at the show on Tuesday, Ethiopian Airlines said it expected to announce an order for about 130 Airbus and Boeing planes shortly after the event.

Leasing company Avolon finalised an order for 40 Boeing 737 MAX 8 planes, while Philippine Airlines firmed up an order for nine Airbus A350-1000 widebody jets and Qantas finalised a deal for nine Airbus A220-300s, confirming a Reuters report.

Reporting by Tim Hepher, Joanna Plucinska, Allison Lampert, Valerie Insinna and Aditi Shah Editing by Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

Magicalsandwichpress on June 23rd, 2023 at 11:14 UTC »

I fail to see how this story is geopolitically relevant.

Shiirooo on June 23rd, 2023 at 11:11 UTC »

I've read IndiGo's financial results and I wonder how can they buy 500 A320s?

Winstonoceaniasmith on June 23rd, 2023 at 09:07 UTC »

SS: On the eve of Narendra modi's visit to the US Indian companies announced record purchases from Western airline companies at the Paris Air show.

Particularly notable was the order 500 A320 by IndiGo. This follows a purchase by Air India of 220 Boeing (US) and 250 Airbus (France) aeroplanes in february.

Between these two events, however came the launch of China's first domestically produced passenger jet the C919 so it may come as a surprise to many for India to not engage with its BRIC partner nation. This may herald an ever closer relationship between the world's largest democracy with the western powers as Modi is set to be the guest of honour at the bastille Day event next month in Paris at which he is expected announce the purchase of 26 more rafale jets for the Indian Aircraft carrier.