By AFP

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Bengaluru

Air India will buy 250 Airbus planes in a deal aimed at transforming the former national carrier, it said Tuesday, after decades as a monumental burden on the public purse.

The airline will purchase 210 narrow-body A320neo jets and 40 long-haul A350 aircraft in an ambitious plan to capture domestic market share and fashion Indian airports into global travel hubs.

"We are going through a massive transformation," said Air India chairman N. Chandrasekaran, announcing the deal with French President Emmanuel Macron and Indian Prime Minister Narendra Modi in virtual attendance.

"One of the most important things is a modern fleet which can perform for all routes."

Air India was founded by Tata Group in 1932 and the Indian government bought a majority stake after independence.

Losses

But by the end of the century, the venture was struggling to compete with Gulf carriers and no-frills airlines, starved of investment and racking up billions of dollars in losses that dragged on the public purse.

Tata — also chaired by Chandrasekaran — finally bought it back in a $2.4 billion deal a year ago.

"Today is a historic moment for India, for Air India and for Airbus," said Airbus chief executive Guillaume Faury. 

"The magnitude of the Air India order... demonstrates the appetite for growth in the Indian aviation industry," he added. 

Air India remains the country's largest international carrier, but its domestic market share stood at only 8.6 percent in September.

30pc domestic share

The carrier is aiming to take a 30 percent domestic share by the end of 2027 while expanding its fleet to cover more international routes. 

"According to several estimates, India will need over 2,000 aircraft in the next 15 years," said Modi.

"This historic announcement will help in catering to this increasing demand."

Macron said the deal highlighted the bond between Paris and New Delhi. 

"I want to tell everybody that for me, this very important contract and this achievement today is one of the milestones of the in-depth strategic and friendly partnership we have between India and France," he said.

Overhaul operations

New Zealander Campbell Wilson was appointed Air India's first foreign chief executive last May to overhaul operations and return it to profitability. 

But the airline faced an onslaught of criticism for its response to a Wells Fargo executive who was allowed to disembark as normal after allegedly urinating on an elderly woman aboard a flight from New York late last year.