Air India Ltd. is in talks with banks to help fund its recently announced record aircraft order, benefitting from the support of new owner Tata Sons Ltd., the carrier’s chief executive officer said. 

“We have the backing of Tata Sons, so there is financing available for these aircraft,” CEO Campbell Wilson said in an interview with Bloomberg News on the sidelines of the CAPA India Aviation Summit in New Delhi on Monday. “We have already made some downpayments for these aircraft from our internal funds.”

Air India has placed an order of 470 aircraft from both Boeing Co. and Airbus SE, with deliveries due to start from the end of this year. Discounts are common for such large purchases. 

The formerly state-run carrier will use cash, shareholder equity, and sale and leaseback of aircraft to help fund the order, Wilson said last month. With the fleet expansion, Air India is seeking to take on the likes of Emirates and Qatar Airways, which dominate lucrative routes from India to the US and Europe through their hubs in Doha and Dubai. 

Wilson didn’t say which banks Air India is talking to. 

India has been quicker than most other nations to get back to pre-Covid levels of air traffic, aided by a strong local market and growing middle class. Domestic air traffic is expected to rise 20% to 160 million passengers in the year through March 2024, and the nation’s carriers may operate a fleet of 1,400 jets by 2030, according to Sydney-based CAPA Centre for Aviation. 

India plans to spend about 980 billion rupees ($12 billion) over the next two years on airports, including new terminals and the renovation of existing facilities to meet surging demand. A lot of that growth may come from smaller cities where air travel penetration is low. 

“India over the last few decades has been punching below its weight,” said Subhas Menon, director general of the Association of Asia Pacific Airlines. “The government is doing what is natural, to build up potential as an aviation hub.”

Air India is preparing to integrate Vistara, a joint venture between Singapore Airlines Ltd. and Tata Group, to form a single, full-service carrier. The airline is spending $400 million to upgrade its widebody planes, replacing all seats and in-flight entertainment systems with new products.  

India’s largest conglomerate Tata bought Air India for $2.4 billion from the government in 2021. The high-profile privatization under Prime Minister Narendra Modi ended decades of attempts to sell the money-losing, debt-laden carrier, which had been kept alive on years of taxpayer bailouts.