Air India said on Monday it plans to fund its $70 billion order for a record 470 aircraft with internal cash, equity and through sale-and-leasebacks, as the airline seeks to rapidly expand its presence in international markets.
Tata Group-owned Air India said on Feb. 14 it would buy 220 planes from Boeing (BA.N) and 250 from Airbus (AIR.PA) in a deal that has eclipsed previous records for an order made by a single carrier.
“We see significant opportunity in long-haul international,” he said, adding that a new order for 70 widebody planes combined with its exiting fleet and other leased aircraft means “a many-fold increase in Air India’s widebody long-haul fleet, and therefore, capacity.”
The airline’s renaissance under the Tata conglomerate, which took control of the previously government-owned carrier last year, aims to capitalize on India’s growing base of fliers and large diaspora across the world.
There is untapped opportunity in direct flights to North America, Wilson said, adding that Air India will also increase the frequency of flights to European destinations, including to places such as Frankfurt, Paris and the United Kingdom.
Air India is inducting 500 cabin crew each month, Wilson said. The airline said last week that it will hire more than 4,200 cabin crew and 900 pilots.
If this news is accurate, it would suggest that Air India is looking to finance a substantial plane order using a combination of cash reserves and equity.
Due to financial difficulties, an aging fleet, and subpar service, Air India, formerly regarded as a world-class airline in India, had its reputation degrade in the middle of the 2000s.