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Tata Group-owned Air India Ltd. is close to signing a deal with Boeing Co. to buy up to 150 737 Max planes, marking the first major aircraft order after the carrier’s privatization, the Economic Times reported, citing people it did not identify.

Air India is likely to place a firm order for 50 737 Max jets with an option to acquire as many as 150, the newspaper reported. Tata formally took charge of debt-laden Air India earlier this year. 

A Boeing spokesperson declined to comment to Economic Times. Air India did not immediately respond to a request for comment outside office hours.

The plans to add more fuel-efficient planes may help the airline to increase its domestic and international market share. Tata’s recent decision to merge Air India with Vistara, which it jointly holds with Singapore Airlines Ltd., is expected to create a behemoth in one of the world’s fastest-growing aviation markets.

The integration is set to make Air India the country’s largest international and second-largest local carrier with a fleet of 218 aircraft.

Industry sources had said in July that Air India was moving closer to a decision on a mega order worth $50 billion at list prices to be split between Airbus and Boeing, which included up to 300 narrowbody and 70 widebody jets.

The reported order would be a win for Boeing, which has said that it was looking to boost its capacity in India to keep pace with rising demand in the world's fastest-growing major aviation market.

Boeing's last mega order in India came in 2021 when low-cost airline Akasa struck a deal to buy 72 737 MAX jets, valued at nearly $9 billion at list prices.

Indian skies are dominated by low-cost carriers including IndiGo, SpiceJet and AirAsia India, with majority of them operating Airbus narrowbody planes. SpiceJet, Boeing's biggest customer in India, has 155 MAX planes on order.

The deal will give Singapore Air a 25.1% stake in the merged carrier for an investment of $250 million. Both the partners have agreed to inject fresh capital if needed in the coming two years in the enlarged Air India, with Singapore Air’s share potentially as much as $615 million.

 

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