BOMBAY – Air India (search) approved on Tuesday the purchase of up to 50 long-range Boeing (BA) aircraft at a cost of about 300 billion rupees ($6.9 billion), the U.S. plane maker's second multi-billion-dollar deal in as many days.
The order, subject to Indian government approval, includes eight 777-200LR ultra-long-range aircraft, 15 777-300ER aircraft and 27 787 long-range aircraft, India's state-run international carrier said in a statement.
Shares in European aerospace group EADS, which owns 80 percent of Boeing's arch rival Airbus, were down 1 percent in Paris on Tuesday, while shares in Britain's BAE Systems Plc (search), which owns 20 percent, were down 1.8 percent.
Boeing Co. had said it hoped to corner a big share of the estimated $35 billion market in India over the next 20 years.
U.S. Transportation Secretary Norman Mineta (search) visited India earlier this month and said he expected India to give full consideration to the offer made by Boeing.
"The Boeing order has to be seen as part of an overall push toward a closer Indo-American strategic alliance," said Kapil Kaul, head of the Center for Asia-Pacific Aviation in India.
"It is a huge step forward for Air India, which is in a very vulnerable stage right now because of the increased competition, and I only hope the order sees the light of day soon," he said.
Air India is facing increasing competition as private carriers Jet Airways and Air Sahara have recently launched flights to Southeast Asia and will soon fly to London.
The Air India order for Boeing -- which has vowed to end the dominance of European rival Airbus, which has outsold the Chicago-based plane maker in every year since 2001 -- comes on the heels of a $6 billion order for 32 wide-bodied Boeing jets from Air Canada on Monday.
The orders also come in the same week that Airbus will launch its headline-grabbing A380 super-jumbo (search), due to make its maiden flight on Wednesday. It is the most closely watched new airliner since the supersonic Concorde first flew in 1969.
Indian newspapers reported that Airbus had complained about an "unfair" evaluation by Air India prior to the board's approval, and questioned Boeing's delivery schedule.
"The Board took note of the fact that there are spillovers in the delivery schedules proposed by both manufacturers," Air India said in its statement.
Air India's board also approved, in principle, an initial public offering by the airline, subject to government clearance. India's aviation minister said in January the government may sell up to a 10 percent stake in the airline as early as next year.
($1=43.68 Indian rupees)