How secret London talks led to Air India’s huge plane order

On Tuesday, it tentatively agreed to receive about 500 jets from Airbus and boeing Domestic and international rivals to take on.

It took months of secret talks that ended in a feast over coastal Indian curry, a stone’s throw from Britain’s Buckingham Palace, to hammer out the biggest deal ever by an airline, according to people involved in the talks.

The secrecy was lifted on Tuesday as leaders hailed the agreement in a diplomatic embrace between major G20 nations. The Tata group, which gained control of Air India last year after decades of public ownership, published just six paragraphs.

Its low-key announcement reflects the publicity-shy founders of IndiGo as well as a growing breed of private airline owners transforming the financially risky Indian airline sector.

The deal had been in the works for more than a year, said insiders who spoke on condition of anonymity to describe details of the process.

Serious talks began last summer and continued until a few days before Christmas when a framework was agreed upon. As the astonishing scale of the deal began to emerge, Reuters reported in December that the parties were inching closer to a record 500-plane agreement.

The center of the dealmaking was the St James’s Court – a luxury Victorian hotel near Buckingham Palace in London’s West End.

The airline’s negotiators, planners and engine veterans camped out for days in a Tata-owned hotel and neighboring suites, negotiating a ritual known as “bak-off” in a classic aircraft industry hothouse atmosphere.

they were chasing a big Piece In a rapidly growing market that has seen the ups and downs of many airline development plans.

Now, Boeing had a chance to restore its position in India’s single-aisle jet market and Airbus’ larger market lead, Airbus wanted a larger share of the wide-body market led by its rival. With the bulging order book, one could not sweep the entire order.

At stake was India’s bid to win back visitors from the highly efficient Gulf carriers and the custom of its own diaspora. Politics set the context but the conversation was businesslike and difficult.

Airbus Chief Commercial Officer Christian Scherer said, “The convergence of the country’s political will to regain sovereignty of international connectivity, with the ambition of the mighty Tatas … If things are done right it really has Has all the ingredients to be solid.” told Reuters on Tuesday.

‘Methodical, Tough’

attention-grabbing competition played around London On a chilly day in December, Airbus finds itself in talks with Air India on one side of the capital Queue Airways in court over the fate of the identical A350 jet two miles away.

Airbus and Qatar Airways later settled their contractual and security row, but Air India was overtaken by Qatar in queuing for the smaller jet, although sources say the Gulf airline also won heavy losses.

Led by Nipun Agarwal, Air India’s chief commercial and transformation officer, and Yogesh Agarwal, head of aircraft acquisitions, the talks often stretched into the night, with salespeople brainstorming new “best offers” fueled by room service.

“Air India negotiated hard and the team is very nice Spicy Despite having no prior aviation experience. “They compare with some of the best dealbreakers in the business,” said one person.

another person WHO Arabs fell, said the Air India negotiators were “methodical, tough and very sophisticated”.

The London talks ended with dinner at Quillon, the hotel’s Michelin-starred Indian restaurant, which is famous for its seafood and coastal cuisine at places like this. Goa and Kerala.

While the major focus in any jet deal is the battle between the planners, the engines are often crucial and can make or stop a wider deal. Plans for announcements on the anniversary of Tata’s takeover of Air India slipped as engine talks progressed.

Insiders say the biggest overall winner is General Electric, which bagged the lion’s share of lucrative engine deals, with its CFM joint venture with Safran beating out Raytheon-owned rival Pratt & Whitney on Airbus A320neos. Rolls-Royce also got a boost from the sale of 40 Airbus A350s.

Highlighting the long road to strategic deals in aviation, GE’s victory had been in the making for nearly 10 years.

In 2014, it won a tender for 27 engines for Air India A320s. Shortly thereafter it persuaded Vistara to source its engines for seven aircraft, which was later converted into an order for 70 aircraft. The turning point was Indigo, which switched from Pratt & Whitney after technical issues that Pratt says have been resolved.

Analysts caution that there are still several hurdles in Air India’s plans. It needs better service and efficiency to make a serious dent in the powerfully established hubs of Doha and Dubai.

But India’s potential will continue to entice traders. CAPA India reported that IndiGo is looking for its own order for 500 jets.

The text of this story is published from a wire agency feed without any modification. Only the headline has been changed.