Air India boosts size of Boeing order

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Air India has increased the size of its now-finalised deal for Boeing widebody and narrowbody aircraft to 68 firm orders from 53 as originally planned.

Boeing revealed the increase in the size of the deal yesterday when it detailed all of the more than 1,000 firm aircraft orders it booked in 2005. The manufacturer shows on its website that in the final days of the year Air India signed for 23 777s, 27 787s and 18 737-800s. A public signing ceremony is scheduled for next week in Mumbai, although the deal is already considered binding.

The state-owned airline originally planned to place firm orders for 10 777-300ERs, five 777-200LRs and 20 787s, all powered by General Electric engines, as well as 18 737-800s. It said it would also take options on three 777-200LRs, five 777-300ERs and seven 787s.

Deliveries of the 737-800s, which are intended for low-cost subsidiary Air India Express, are due to begin later this year while the first 777s will be delivered early next year. Deliveries will continue until 2012.

Air India has not ordered new aircraft in more than a decade and has instead been relying heavily on leasing to increase the size of its fleet. In April it started seeking government approval to place the major Boeing order and recently began seeking financing for pre-delivery payments.

The airline confirms from that final government approval was recently secured to increase the size of the firm order as demand for air travel to and from India has been growing much faster than originally anticipated. "The market has been so bullish since this order was first mooted so you could take these as all firm orders,” it says. "They may not even be enough. We may need to go back for another order,” the company adds.

Air India currently has 12 Boeing 747-400s, one 747-400 Combi, two 747-300 Combis, two 747-200s, 20 Airbus A310-300s and four 777-200ERs, the majority of which are leased, while Air India Express has three leased 737-800s. Bhargava says the group fleet should amount to 74 owned aircraft by 2012 as it will be phasing out all its existing aircraft apart from six 747-400s that it owns.

Its eight 777-200LRs and 15 777-300ERs will have three-class configurations while its 27 787s will have two-class configurations. Its 18 737-800s will have single-class configurations.