Air India will buy 250 aircraft from France’s Airbus, in what is billed as the world’s largest aviation deal in history, announced on Tuesday. The deal includes 40 A350 wide-body ultra-long-range aircraft. The rest will be narrow-body aircraft.

Addressing a virtual meeting with French President Emmanuel Macron on the agreement, Prime Minister Narendra Modi described the deal as historic and expressed confidence that India will emerge as the third-largest global market in the aviation sector in coming years.

Chairman of Tata Sons Natarajan Chandrasekaran announced the deal at the virtual ceremony saying “We have built a very good relationship with Airbus. Today I am happy to announce that we have signed a letter of intent to acquire 250 aircraft from Airbus.”

“We have significant options to increase the fleet orders once we grow,” Mr Chandrasekaran said. Civil Aviation Minister Jyotiraditya Scindia, veteran industrialist Ratan Tata, and other leaders were present during the virtual conference.

French President Emmanuel Macron congratulated India for offering an opportunity for the strategic partnership in the aerospace sector. He said his country’s companies are fully dedicated to developing new areas of cooperation. France has achieved so much with India in various sectors including space, cyber, defence and energy transition.

“It is a historic moment for Airbus to help script Air India’s revival,” Airbus chief executive Guillaume Faury said in a video conference.

Modi said civil aviation is playing an instrumental role in the growth of the country. He said the Indian aviation sector will need more than 2,000 aircraft in the next 15 years. The Air India-Airbus deal shows strengthening of strategic partnership between India and France, he said. The deal will help in fulfilling the growing demands of the aircraft.

The prime minister said new opportunities are emerging in the aerospace manufacturing sector under the vision of Make in India and Make for the World. He said India can become a Maintenance, Repair, Overhaul (MRO) hub for the aviation sector.

On India-France relationship, the Prime Minister said both countries are significantly contributing on various issues including security and stability in the Indo-Pacific region, global food and health security.

He said India and France partnership is playing an instrumental role in ensuring stability and balance of international order and multilateral system.

Highlighting the initiatives taken under the Regional Connectivity Scheme-UDAN, the prime minister said the number of airports in the country has increased from 74 to 147 in the last eight years. He said remote parts of the country are being connected through air connectivity which helped in socio-economic development.

Air India was looking for a remix of aircraft to boost their domestic and international network through recent orders. Soon after the divestment of the airline, CEO Campbell announced to the AI employees that the airline is going for a historic order.

On the occasion of its first anniversary on 27 January this year, Air India said the airline will transform itself over the next five years to being among the best globally with an Indian heart.