Employment, economy, elections: How Air India deal is an ideal example of India’s rising global profile


NEW DELHI: The Tata group-owned Indian water broke records on Tuesday when it placed the largest-ever aircraft order in global aviation history with US manufacturer Boeing and European counterpart Airbus. In a single day, the salt-to-software conglomerate stacked Air India’s shopping cart with 470 planes (250 from Airbus and 220 from Boeing) with an option of buying 70 more from the American firm.
The multi-billion dollar deal, which was hailed by PM ModiFrench President Emmanuel MacronUS President Joe Biden and UK PM Rishi Sunakwas much more than just an ambitious business decision by a carrier eyeing renaissance under the Tata conglomerate.

Air India’s generous orders had deeper political implications for leaders like US President Joe Biden and UK PM Rishi Sunak, who are both facing crucial elections next year. Besides, the private aircraft deal also gave a fillip to India’s rising global profile as the country further cements its position as a geopolitical force.
‘1 million American jobs’
The deal’s global impact was summed up ideally by noted cricket commentator Harsha Bhogle in his tweet: “I hadn’t imagined a day would come when an American President would issue a statement that an order placed by an Indian company would lead to ‘one million American jobs over 44 states'”.

Bhogle was referring to Biden’s statement about the deal — itself quite rare — wherein the US President hailed the historic order by Air India that would lead to the creation of American jobs.
“I am proud to announce today the purchase of over 200 American-made aircraft through a historic agreement between Air India and Boeing. This purchase will support over one million American jobs across 44 states, and many will not require a four-year college degree,” Biden said.
Notably, by highlighting that most American workers who will benefit from the deal will not require a college degree, President Biden subliminally appealed to the white voter base in the country, many of whom are blue-collar workers.

Jobs in UK too
Like Biden, UK Prime Minister Rishi Sunak also hailed Air India’s historic orders, saying they would create jobs and boost exports from Britain, where the French planemaker designs and makes aircraft wings.
The large A350 aircraft of Airbus are powered by XWB engines made by British company Rolls-Royce. It has already received an order from Air India for 68 Trent XWB-97 engines, in addition to an option for 20 more.
Welcoming the “landmark agreement”, Sunak said that Air India’s deal with Airbus and Rolls-Royce shows “sky’s the limit” for the UK’s aerospace sector.

“The agreement announced by the companies this morning (Tuesday 14 February) will support and create new highly skilled jobs in Wales and Derbyshire, helping to boost exports, grow the economy and level up the UK,” the British government said in a statement.

It said that a significant portion of the manufacturing process for the new aircraft is expected to take place in the UK.
“The wings will be designed in Filton, and assembled in Broughton, which is expected to bring an additional 450 manufacturing jobs and more than £100m of investment to Wales. The large A350 aircraft are exclusively powered by Rolls-Royce XWB engines, which are assembled and tested in Derby,” the press release said.
Clearly, Air India’s deal gives significant political heft to Sunak, who not only faces crucial elections next year but is racing against time to fulfil his promise of creating more jobs in the UK.
Strategic ties & India’s stature
Indian and French leaders highlighted the political and economic importance of Air India’s deal with Airbus during a ceremony attended virtually by PM Modi and French President Macron.
Speaking at the event, Macron said the deal highlighted the growing bond between Paris and New Delhi.
“I want to tell everybody that for me, this very important contract and this achievement today is one of the milestones of the in-depth strategic and friendly partnership we have between India and France,” he said.
“This achievement shows that Airbus and its partners, including Safran, are fully committed to develop new areas of cooperation with India and we have achieved so much with India in a wide range of sectors from space to cyber, from defence to culture, from health to energy transition,” he said.

Macron went on to accentuate New Delhi’s rising global stature and said that he is working with PM Modi to ensure the success of India’s G20 presidency in the backdrop of Russia’s invasion of Ukraine.
“We are working for the success of India’s G20 Presidency in a difficult context with the Russian aggression against Ukraine,” Macron said during the leaders’ virtual meeting.
“India, under your leadership, clearly can be the one to mobilise the whole world and help us address the tremendous issue we have in front of us,” the French President told PM Modi.
Growing influence
The deal, which would be worth tens of billions of dollars, comes at a volatile time for plane giants whose jets are again in demand after the pandemic, but who face mounting industrial and environmental pressures.
“It is important for the industry because given the recent turbulence in the China market, the alternative growth market is India,” independent aviation adviser Bertrand Grabowski told Reuters.
“India is also 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 Grabowski, a former banker with extensive experience of financing international aviation deals.
The record order also aims to put Air India in the league of large global airlines and make it an influential customer for planemakers and suppliers.
It reflects a strategy to recapture a solid share of trips between India’s diaspora and cities such as New Delhi and Mumbai that are currently dominated by foreign rivals such as Emirates.


Air India signs largest aircraft deal with Airbus, Boeing

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Air India unveiled orders for 470 Boeing and Airbus passenger jets as it races to tap surging demand for increasingly affordable air travel from the nation’s growing ranks of middle-class consumers.

Boost to Indian civil aviation
The massive deal also puts the spotlight on India’s growing aviation sector which is eyeing a significant chunk of the global business.
Notably, Air India’s order tops American Airlines’ combined deal for 460 Airbus and Boeing planes more than a decade ago.
On Tuesday, in the backdrop of the deal, PM Modi said that India’s growing aviation sector would need over 2,000 aircraft in the next 15 years.
Similarly, Boeing said that with India’s commercial aviation market rebounding from Covid, the country will need 2,210 new planes over the next two decades.
According to Airbus’ forecast last year, India would need 2,210 new planes over the next two decades, the same as Boeing’s latest forecast.
“India’s aircraft departures are already back above pre-Covid levels, compared with about 77% for the global aviation market as a whole,” Boeing’s Asia Pacific commercial marketing managing director Dave Schulte told reporters at the Aero India airshow in Bengaluru.
He said that India’s aviation sector still has enormous growth potential. “Even if just 1% of India’s 23 million daily train passengers upgrade to flights, the market will immediately double in size,” Schulte said.
Indian carriers have ordered hundreds of aircraft worth billions of dollars in recent years to cater to a growing number of fliers.
(With inputs from agencies)


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