Air India orders can boost India’s prowess

A year after Air India returned to the ownership of Tata group, it announced the largest ever deal in the world for commercial planes Sourcing from both Boeing and Airbus, AI ordered 470 jets In addition, there are options to increase the size of the order Reports put the gross value of the deal at $85 billion, making it the largest ever in nominal terms The deal’s scale has everything to do with India’s economic prospects India is expected to remain one of the fastest growing major economies in the foreseeable future This will expand demand for air travel Boeing forecast that India will need more than 2,000 new commercial aircraft over the next two decades This is the context in which the political participation of PM Modi and Biden and Macron, should be viewed

One of India’s advantages today is that of economic heft and the potential to give it the space to simultaneously access overflight routes over Russia and buy planes from US and French companies In this context, India needs to get more out of its economic deals Both Airbus and Boeing also make military aircraft Both companies already have independent manufacturing facilities in India where different units of the Tata Group are partners However, given the potential demand from both the civilian and military side, India needs to get more of their supply chain based here Unless India’s manufacturing capacity gets far more out of these deals, technological diffusion in the domestic manufacturing ecosystem will be relatively limited That will feed back into both economic potential and strategic leverage Both GoI and industry need to figure out ways in which a lot more benefit can be extracted in exchange for India’s markets

By placing the orders, the Tata group has confirmed their commitment to staying the course and turning around Air India Coupled with the patient capital approach of the Tata Group, this development’s impact will flow through to the entire aviation value chain This will enable Air India to engage in a complete fleet renewal coupled with significant expansion Locally, Air India faces a formidable competitor in IndiGo which flies a fleet of 308 aircraft and has more than 55% of the market locked up Air India after combining four entities where majority holding is with the Tata Group has a fleet of 220 aircraft with 26% of the market So there is a fair gap to be covered There’s also a fast-growing competitor in Akasa, which has captured more than 2% of the market in five months since launch that will surely impact margins Internationally, airlines like Emirates, Qatar Airways, Singapore Airlines, British Airways and Lufthansa have already upgraded their product and will roll-out new features that at the very least will have to be matched

Thought for the week

Mar cus Aure lius

Accept the things to which fate binds you, and love the people with whom fate brings you together, but do so with all your heart -

Political Sketchbook

Alpesh Patel

India’s Huge Multilateral Jet Deal

I ndi a should not have oliga rchs or favoure d b usi nes ses But i f you w ere going to f avour anyon e, top of my lis t w ould be Tata (Proba bly Ma hendra too)

So as the largest ever plane deal was signed this week and the Heads of UK, US and France announced the deal I was especially pleased to be in France at the time

To me most things in my life are a movie script So here is how I imagined my French trip with my son and wife I hope the French Ambassador to the United Kingdom is reading this love letter to his country (It was Valentines this week of course and the French are as romantic as Lord Krishna!)

SC ENE 1:

FATHER strolls down the Champs-Elysees, looking at his SON with intensity

FA THER:

"Listen to me, son The greatest French thinkers have given us invaluable advice that has survived the test of time Their words are like a lighthouse guiding us through the darkest storms of life "

SON looks at hi s f ather, curious to kn ow more

FA THER:

"Voltaire said, 'I disapprove of what you say, but I will defend to the death your right to say it ' He reminds us of the importance of free speech and how essential it is to defend our right to express ourselves "

SON nods i n ag reement

FA THER:

"Rousseau taught us that we should always follow our natural impulses and be true to ourselves He believed that society corrupts us and that we should live in harmony with nature "

SON rai ses an eye brow, i ntrig ue d

FA THER:

"And then there's Montesquieu, who emphasized the importance of separation of powers in government He believed that the only way to prevent tyranny was to have checks and balances between the different branches of government "

SON lis tens atte ntive ly

FA THER:

"These great thinkers remind us of the values that we must uphold as citizens The freedom of expression, the importance of individuality, and the need for accountability and transparency in our institutions Never forget their words, son They have the power to shape your life and make you a better person

SON looks up to hi s f ather

SON:

"I won't forget, dad Thanks "

FA THER: (hugging his son)

"Anytime, son You're the future, and I have faith that you'll make it a better one "

"Sure dad, but first, when are we getting that crepe? Are you lost again? I knew I should have brought mamma "

Continued on page 10

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