India appears poised to reap its first tangible benefit from the escalating US-China tariff war, with Air India actively seeking to acquire Boeing aircraft originally destined for Chinese carriers but now blocked due to geopolitics.

As the TATA Group-owned airline urgently pursues its ambitious revival and expansion plans, it is eyeing Boeing 737 Max jets that Chinese airlines can no longer accept after Beijing imposed tariffs of up to 125% on US-made goods and instructed its carriers to halt Boeing deliveries.

This opportunity arises at a crucial moment for Air India, which is in dire need of new aircraft to remain competitive—especially against IndiGo, India’s market leader. The airline has already benefited from China’s previous reluctance to accept Boeing jets, having taken delivery of 41 737 Max planes originally built for Chinese customers whose deliveries were deferred due to regulatory and safety issues.

With the latest round of tariffs, about ten more jets that were being readied for Chinese airlines have been redirected back to the US, and Air India is keen to secure these as well as any future delivery slots that become available.

Air India’s immediate focus is on acquiring more of these ready-made 737 Max narrowbody jets for its low-cost subsidiary, Air India Express, which is being positioned to challenge IndiGo’s dominance in the budget segment. The airline is set to receive around nine more stored 737s by June, which would bring its total tally of such planes to 50. However, the pool of available jets was expected to run dry soon, but the ongoing US-China trade tensions may prolong this windfall for Air India.

The process is not without complications. Many of these jets have cabin configurations tailored to the original Chinese customers, and some payments have already been made, making reallocation complex. 

Additionally, Boeing cannot reassign aircraft that remain under contract with Chinese airlines. Despite these hurdles, Air India is eager to move quickly, as its own large order of 140 narrow body jets placed in 2023 will not begin delivering until after March 2026, leaving a potential gap in capacity if it cannot secure additional aircraft in the interim.

Other Asian carriers, such as Malaysia Aviation Group, are also in talks with Boeing to snap up delivery slots vacated by Chinese airlines, highlighting the broader regional interest in capitalizing on the disruption caused by the US-China trade dispute.

In the longer term, the ongoing trade and geopolitical friction threatens to shut Boeing out of the lucrative Chinese market altogether, giving rival Airbus a significant advantage. For now, however, Indian carriers like Air India and Akasa Air are well positioned to benefit from Boeing’s surplus inventory, potentially accelerating their fleet expansion and competitive positioning in both domestic and international markets.

Agency