Air India rules out more Boeing jet orders for now, CEO says

By Joanna Plucinska

LONDON (Reuters) -Air India is holding off on exercising its outstanding options to buy additional Boeing jets until the planemaker has cleared its backlog, CEO Campbell Wilson told Reuters on Wednesday.

"We don't want to commit to anything until we have confidence of when it's going to come. And likewise, they (Boeing) don't want to offer something until they have confidence of when it's going to come," Wilson said in an interview in London. 

The former state carrier is in the midst of a multi-billion-dollar revamp in the face of established competition, after Tata Group took it over more than two years ago.

In 2023, Air India ordered 250 new jets from Airbus and 220 from Boeing to revive its appeal with an all-new fleet. The airline also signed options to buy an additional 70 planes from Boeing, including 50 737 MAXs and 20 787 Dreamliners. 

It topped that up with an order for an additional 85 Airbus jets in October. 

Air India previously struggled with years of limited investment under state ownership, prompting a dramatic restructuring plan.

Boeing has a production cap of 38 jets a month, imposed by the U.S. Federal Aviation Administration last year after a door blew out on an Alaska Airlines plane and scrutiny of Boeing's safety and manufacturing procedures increased.

Wilson said Air India was in "constant contact" with the manufacturer, with its most recent check-in taking place last week.

REVAMP DELAYS

Wilson said he expects Air India's plane order book to be filled more slowly than initially set out, but is hopeful its turnaround plan will bear fruit in the coming years. 

"We expect to get them, but do we expect to get them according to timeline? No, we don't. And I think that every airline would tell you the same thing," he said. 

Delays are also expected when it comes to parts and supplies needed to refit existing planes by upgrading to more premium seats and in-flight options. 

"We've had delays from pretty much every supplier for every one of our seat (upgrade) programs, some as short as six to nine months, others as long as 18 months," Wilson said. 

"That just pushes out the whole product transformation longer than we had hoped."

The delivery delays do not have Air India looking to order China's COMAC planes yet. But that does not rule it out from considering the planemaker in the future, Wilson said. 

"If people can produce a good, safe, reliable product, and they can commit to being able to service it for the life of its operation, I think we would never be closed to alternatives," he added. 

(Reporting by Joanna Plucinska; Editing by Toby Chopra and Rod Nickel)