Could the US-China trade tensions be a blessing in disguise for Air India?

Air India

Indian Market
by 5paisa Research Team Last Updated: 2022-10-18T09:48:06+05:30

As unlikely as it may sound, the ongoing trade tensions between the US and China may well come as a blessing in disguise for the Indian conglomerate Tata Group.

According to a Bloomberg news report, Boeing Co. is offering 737 Max jets once slated for Chinese customers to Air India Ltd as the planemaker tries to offload some of the roughly 140 aircraft it’s currently not allowed to deliver.

The Indian carrier, which is overhauling its fleet under new owner Tata Group, is one of a number of potential customers for Boeing, which is in talks with lessors and other airlines, the report said. 

Why is this important for Air India?

After taking the loss-making airline over from the government, the Tatas are overhauling it and are in the process of adding new planes to its fleet while taking some older ones out. 

This comes even as the Tatas are in talks with Singapore Airlines to merge their other full-service carrier, Vistara, with Air India. 

But why can’t Boeing sell the planes to Chinese carriers?

The US manufacturer hasn’t been allowed to deliver Max aircraft to China for more than three years as it grapples with escalating trade tensions and repercussions from two fatal crashes of the workhorse jet. China was the first to ground the Max in March 2019, and held off approving its return long after US regulators lifted a ban in late 2020.

Could this mean Air India may get these places for a discount?

Apparently so. 

How many planes does Air India need?

Air India has sought to order as many as 300 narrow-body aircraft to revamp its aging fleet. 

But could the Chinese carriers still take some planes?

The Bloomberg report said that if tensions with the US ease, Chinese carriers could still take a bulk of the aircraft, but are unlikely to take all of them.

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