Reuters reported last month that Air India was closing in on a deal for around 500 jets.
The order, once finalised, aims to bring Air India into the league of large global airlines and make it an influential client for planners and suppliers, at a time when its domestic market has witnessed a post-Covid travel boom going.
Domestic passenger air traffic in India is set to grow 47% in 2022 from a year earlier, government data shows.
Analysts warn that the airline faces stiff competition given the connectivity created by local and international rivals.
India, which is set to overtake China as the world’s most populous country, has a large, under-served air travel market dominated by budget carrier IndiGo. However, the bulk of passenger traffic outside India is carried by Middle Eastern airlines such as Emirates and Qatar Airways.
Resurgent Air India
Under its new owners, Air India is looking to restore its reputation at home and abroad as a one-stop carrier with impeccable service and world-class aircraft.
It has put back into service about 20 aircraft that were grounded for years due to lack of spares and funds. The airline also said it would spend more than $400 million to upgrade its entire legacy wide-body fleet of 27 Boeing 787-8s and 13 777 aircraft.
It aims to capture 30% of the domestic air travel market in the next five years and thus narrow the gap with market leader IndiGo. The airline’s new chief executive, Campbell Wilson, previously said it was looking to grow its current share of international travel by “multiples”.