In what seems like a strategic move amid the escalating trade war between the United States and China, Air India has moved to take the Boeing jets rejected by Chinese airlines due to Donald Trump’s tariffs, Bloomberg reported citing sources.
India’s largest carrier, owned by the Tata Group, is now in the fray with other Asian airlines seeking to benefit from the breakdown of trade ties between the US and China, it added.
Air India to buy Boing jets? What we know so far
According to the report, Air India “urgently needs aircraft” for its revival plan and will tap Boeing to take the rejected planes. The sources added that Air India is also open to take up future slots that become available for deliveries.
Notably, the last time Donald Trump was in office and started a trade war with China in 2019, Air India was among the beneficiaries — it accepted around 47 Boeing planes (737 Max jets) originally made for Chinese carriers.
Air India and Boeing did not respond to queries.
The report, citing local Bernama publication, added that besides Air India, Malaysia Aviation Group Bhd has also reached out to Boeing with an offer.
Why is Air India in need of new planes?
The sources told Bloomberg that Air India is interested in more of the already-made Max narrowbodies for its low-cost Air India Express subsidiary, as it seeks to challenge competitor IndiGo.
Air India was set to receive about nine more stored 737s through June, taking the total tally to 50 planes, Bloomberg News reported earlier this month. The pool was expected to run dry in a couple of months but with the US-China tariff war recasting the landscape, Air India’s Boeing windfall could continue.
The planes are typically repainted in Bengaluru. Air India Express intends to replace business class on the ones it receives with economy by April 2026, but progress has been slowed by supply chain issues, the sources said.
The remaining 140 narrowbody deliveries from Air India’s 2023 order aren’t expected to start until after March 2026, putting the airline at risk of falling further behind IndiGo if it can’t secure any newly freed-up Boeing planes.
Air India’s growth is also set to slow because of a retrofit programme that will temporarily remove some jets from its fleet, and a plan to phase out some Airbus models. Chief Executive Officer Campbell Wilson said last month that the company is trying to woo customers with cheaper fares as it seeks to make up for dated cabins and upgrade delays.
China rejects Boeing planes: Background
Chinese airlines were told by the government not to accept Boeing aircraft, Bloomberg News reported last week, after Beijing set reciprocal tariffs of up to 125 per cent on US-made goods. About 10 planes were being prepared for delivery at the time, and some 737 Max jets in China have since been sent back to the US.
Any Boeing planes already built or in progress will present complications for potential buyers, as the cabin configurations for many will already have been set by the original customer, and some payments will have been made. Boeing can’t place any aircraft with new owners that are still under contract to airlines in China.
The interest from non-Chinese airlines is likely to soften the short-term blow for Boeing, one of the highest-profile US exporters, should the tariff war continue. Still, the trade conflict may complicate efforts to wind down a so-called shadow factory for stored 737s this summer. The US manufacturer is expected to provide an update on the situation with its quarterly results this week.
Friction between Washington and Beijing has given Europe’s Airbus SE the advantage over Boeing in China over the past several years. In the longer term, geopolitics threatens to shut Boeing out of one of the world’s biggest aircraft markets.
Boeing built up an inventory of hundreds of undelivered 737 Max jets starting with its grounding, spurred by two deadly accidents, and continuing through the pandemic. Regulators in Beijing were among the last to clear the jet, and other issues also slowed deliveries, leading the US planemaker to eventually start remarketing the planes. Last year, Chinese regulators paused 737 deliveries for two months over concerns with lithium batteries in cockpit voice recorders.
(With inputs from Bloomberg)
