Air India is buying up to 290 Boeing jets in what the Biden Administration called an "historic agreement" that "reflects the strength of the U.S.-India economic partnership."
The purchase is part of a record 470 order from Boeing and competitor Airbus.
"India is sending a strong political signal that it wants to remain attached to the West at a time when it has appeared ambiguous on Russian sanctions," said independent aviation adviser Bertrand Grabowski.
According to Boeing, Air India will purchase 190 737 MAXs, including 737-8s and 737-10s, with options for 50 more jets to serve the carrier's domestic and international network.
The Airbus order includes 210 A320neo narrow body planes and 40 A350 wide body aircraft, which Air India will use to fly "ultra-long routes."
The deal tops American Airlines' combined deal for 460 Airbus and Boeing planes more than a decade ago.
Even after significant expected discounts, the order is expected to be worth tens of billions of dollars at a volatile time for planemakers whose jets are again in demand after the pandemic, but who face mounting industrial and environmental pressures.
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Air India will also expand its international routes by purchasing 20 787-9 Dreamliners, with options for 20 more jets, while becoming the newest 777X customer through the purchase of 10 777-9s.
India's flag carrier announced Tuesday the resumption of non-stop service between Mumbai and New York. Service has been suspended since early 2019.
Stan Deal, president and CEO of Boeing Commercial Airplanes, said in a company release, Air India’s decision "will support engineering and manufacturing jobs at Boeing factories in Washington state, South Carolina and across our supply base."
"Air India is well positioned to achieve its expansion plans and become a world-class global airline with an Indian heart," he added.
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Air India has also contracted with Boeing Global Services for lifecycle support services, including digital solutions, spare parts and landing gear exchange programs, pilot and maintenance technician training, aircraft modifications and other services, Boeing stated.
Campbell Wilson, CEO of Air India, said the acquisition of nearly 300, highly advanced Boeing jets is a core element of the company’s comprehensive transformation and growth strategy.
Wilson is working to revive Air India's reputation as a world-class airline and shake off its image as a tardy, run-down operation with an ageing fleet and poor service.
Air India, with its maharajah mascot, was once known for its lavishly decorated planes and stellar service but its reputation declined in the mid-2000s as financial troubles mounted.
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Boeing is up 13% year-to-date and around 2.5% the last month. Airbus is up about 2% on the Paris Exchange, and flat in the past month.
Reuters contributed to this report.
