Amid increasing geopolitical tensions between the United States and the People's Republic of China, the Indian airline Air India has expressed interest in several Boeing 737 Max aircraft originally intended for Chinese airlines. Since these aircraft will not be delivered due to political and economic differences, Air India is now exploring the possibility of accessing these aircraft in the short term to expand its fleet. The aim is, in particular, to accelerate the expansion of its low-cost subsidiary Air India Express and to compete with regional rivals such as IndiGo.
The United States and China have been locked in a complex economic conflict for years, which has led to, among other things, mutual tariffs and trade restrictions. Recently, Chinese airlines were effectively banned from taking delivery of new Boeing aircraft. This particularly affects 737 Max aircraft, which were already in their final stages of development. On April 22, 2025, two aircraft of this model returned from the Boeing factory near Seattle, even though their delivery to Chinese customers was scheduled.
In response to US measures, China imposed extensive retaliatory tariffs on American products, including aerospace equipment, with rates of up to 125 percent. This not only has economic repercussions but also leads to a backlog in the delivery of finished aircraft, some of which are now sitting idle on American factory premises.
Strategic considerations at Air India
This presents a strategic opportunity for Air India, owned by the Tata Group. The company is currently undergoing a comprehensive transformation process that includes modernizing and significantly expanding its fleet. Particular attention is being paid to its subsidiary Air India Express, which aims to attract customers with a growing range of low-cost flights, particularly within the subcontinental and mid-international markets.
According to reports, Air India is aiming not only to acquire the immediately available aircraft but also to secure future delivery positions should further deliveries to Chinese customers remain permanently blocked. Air India has already benefited from similar situations in the past: For example, it acquired 41 Boeing 737 Max aircraft whose original orders were canceled by Chinese airlines following the worldwide grounding of the aircraft in 2019.
Complexity of the transfer: Not a simple process
However, the short-term acquisition of aircraft intended for other customers presents challenges. In many cases, the aircraft already have specific technical configurations—including engines, cabin interiors, or paint schemes. Furthermore, the Chinese customers have already made advance payments, which requires a mutually agreed reversal.
For the acquiring buyer, such as Air India, this means that in addition to the actual aircraft acquisition, financing, insurance, and personnel planning must also be reorganized. In particular, aircraft crews must be trained and deployment plans adjusted. The bureaucratic and logistical effort is correspondingly high.
Growing demand in the Asia-Pacific region
The move comes at a time when demand for air travel in the Asia-Pacific region continues to grow. According to current forecasts by the International Air Transport Association (IATA), India will become one of the world's largest aviation markets over the next ten years. Domestic air traffic within India grew by over 2024 percent in 12. For Air India, this means increasing pressure to build capacity and secure market share.
The Indian government supports this course and is pursuing ambitious goals for the expansion of the country's aviation infrastructure. New airports, improved safety standards, and tax incentives are intended to motivate private and public operators to expand their fleets and make them more efficient. As part of this strategy, Air India aims to have over 2025 Boeing 50 Max aircraft in operation by the end of 737 – a significant step toward a more powerful fleet.
Competition never sleeps: Malaysia Airlines also interested
Air India isn't alone in this endeavor. Malaysia Airlines has also expressed interest in short-term Boeing 737 Max aircraft, according to agency reports. The airline intends to expand its capacity to meet growing demand. This increases competition among potential buyers and could lead to a bidding war.
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