On 14th February, Tata-owned Air India announced two mega aircraft procurement deals. Breaking the record for the largest order placed by an airline at one go, Air India placed orders for a staggering 470 aircraft from Boeing and Airbus. The airline is acquiring 250 aircraft from Airbus in Europe, while 220 planes have been ordered from US-based Boeing.
The size of the deal is so big and it will generate so much business in the countries where the manufacturers are located that US President Joe Biden, French President Emanuel Macron, and British Prime Minister Rishi Sunak hailed the deal. The deal will generate large numbers of employment in the USA, France and the UK at a time when the world is going through a recession, and therefore these two deals have been described as historic.
Announcing the Air India deal with Boeing, president Joe Biden said that it will support over one million American jobs across 44 states. Apart from these three countries where the Airbus and Boeing aircraft along with Rolls Royce, CFM LEAP and GE engines are manufactured, jobs will also be generated in several other countries from where Airbus and Boeing source aircraft parts.
While the record number of aircraft is ordered by Air India which is now owned by the Tata group, the Modi government has also been hailed for it. This is because governments are always closely involved in such mega deals. The deal marks India’s close ties with major nations in the world and shows how as a major market, India can’t be ignored.
And due to this, the opposition in India is trying to poke holes in the deal. Congress leader Manish Tewari took the lead in this today and claimed that while the deal will generate jobs in other countries, it will generate zero jobs in India. He asked why Indians are celebrating when no jobs will be created in India from the purchase of 470 aircraft by Air India.
He tweeted today morning, “Those exulting about @TataCompanies owned @airindiain buying 470 aircraft’s should answer one simple question- HOW MANY MANAFACTURING OR OTHER JOBS WILL THE AIRCRAFT ORDER CREATE IN INDIA? ANSWER IS ZERO THEN WHAT PRAY ARE WE CELEBRATING?”
Those exulting about @TataCompanies owned @airindiain buying 470 aircraft’s should answer one simple question-
— Manish Tewari (@ManishTewari) February 16, 2023
HOW MANY MANAFACTURING OR OTHER JOBS WILL THE AIRCRAFT ORDER CREATE IN INDIA ?
ANSWER IS ZERO
THEN WHAT PRAY ARE WE CELEBRATING? https://t.co/VMxiegdzWw
Creation of jobs in India
Netizens were quick to help him, informing him that the 470 planes will not be bought for display, and they will not operate on their own. As many Twitter users told him, each aircraft generate several direct and indirect employment, and therefore 470 planes will create a good number of jobs in India after they are delivered, after creating jobs in the countries where they are manufactured.
A large team works around a team, including pilots, crew, ground handling staff, baggage loaders, people working at the airport, maintenance staff, and many others. The airlines also generate lots of indirect employment. With 470 new planes, which is more than 3 times the current fleet size of Air India, there will be much more routes served, more airports connected, and more flights flown, which will generate additional activities, and people will be needed to perform those activities.
Therefore, the 470 planes purchased by Air India will actually generate a large number of jobs in India after they are delivered. Apart from that, they will generate or support some jobs during manufacturing also. While it is true that Boeing and Airbus planes are made in the USA and Europe, it is also important to note that the companies depend on a global supply chain to assemble each plane. An aircraft is made up of millions of parts, and they come from all over the world.
Manufacturing in India
In recent times, thanks to the Make In India initiative of the Modi government, India also has become part of the countries that make aircraft parts. Tata Boeing Aerospace Limited, a joint venture between Boeing and Tata Advanced Systems Limited, manufactures the vertical fin structure for Boeing 737 aircraft in its Hyderabad plant. Just two days ago on Tuesday, the first batch of the vertical fins was shipped from India to the Boeing plant in Renton in Washington state.
Of the 220 planes ordered from Boeing, 190 are from the 737 Max alone, with the option of 50 more. Therefore, the vertical fins for these aircraft will be made in India by the Tata Boeing plane. Moreover, with the massive manufacturing requirements for such a large order, it is possible that Boeing can use the TABL facility to make other parts also in the future. Apart from the 737 vertical fins, the plant also makes aerostructures for Boeing’s AH-64 Apache helicopter. The plant makes including fuselages, secondary structures and other parts like vertical spar boxes.
Tata also has a joint venture with Airbus, and the foundation stone of a plant to manufacture C295 military transport planes was laid by PM Modi in October last year.
To power the Boeing and Airbus planes, Air India also signed deals with Rolls Royce to supply engines for Airbus planes, and CFM International and GE to supply engines for Boeing planes. These engine makers also have a presence in India, which means some manufacturing work for the mega deal will be done in India too.
Air India has ordered a record number of 800 LEAP engines made by CFM, which is the largest order for the engine, to power the entire fleet of narrowbody aircraft from both manufacturers. The Airline has ordered 800 engines for 140 A320 Neo, 70 A321 Neo and 190 Boeing 737 Max planes, totalling 400 planes. Apart from these, 40 GEnx-1B engines for 20 Boeing 787s and 20 GE9X engines for 10 Boeing 777s have been ordered from GE. For the widebody Airbus planes, Air India has ordered 12 Trent XWB-84 engines for 6 A350-900 planes and 68 Trent XWB-97 engines for 34 A350-1000 planes from Rolls-Royce.
The Tata group also have a partnership with GE to make parts for the CFM LEAP engine. It is notable that CFM is a joint venture between GE and French engine maker Safran. In November last year, Tata Advanced Systems signed a $1 billion deal with GE to make components for FM International LEAP engines. Therefore, with a massive order for 800 LEAP engines, a large number of components will be made in India by the Tata Centre of Excellence for Aero Engines.
Replacement claim
After netizens pointed out that the 470 planes will indeed create jobs in India, Manish Tewari made another bizarre argument. This time, he claimed that most of these aircraft are to replace old aircraft, not to expand the fleet. Therefore, they will not require additional manpower, and so no new jobs will be created.
He also claimed that as Air India is downsizing personnel- Employees to aircraft ratio, the workforce will come down.
Those exulting about @TataCompanies owned @airindiain buying 470 aircraft’s should answer one simple question-
— Manish Tewari (@ManishTewari) February 16, 2023
HOW MANY MANAFACTURING OR OTHER JOBS WILL THE AIRCRAFT ORDER CREATE IN INDIA ?
ANSWER IS ZERO
THEN WHAT PRAY ARE WE CELEBRATING? https://t.co/VMxiegdzWw
This is a bizarre and completely baseless argument, because the current fleet size of Air India is 113 aircraft, while the order is for 470 planes. Therefore, even if the entire fleet of 113 planes is replaced, there will be 357 additional aircraft. Such a large number of planes can’t be operated with the existing manpower, and therefore a large number of direct and indirect jobs will be generated.
It is also notable that a good number of planes in the Air India fleet are new, as they were ordered in 2004 when Praful Patel was the civil aviation minister. As many as 111 planes were acquired from both Airbus and Boeing, the deal that caused massive losses for the airline forcing the govt to privatise it. It has been alleged that Air India was forced to order more planes than it needed by the minister, bleeding its finances.
While 111 planes were ordered, they were not delivered at once, as only a limited number of planes can be made in a year. In fact, the last 787 Dreamliner ordered was delivered in October 2017, just 5 years ago. Similarly, the airline received the first delivery of the A320 Neo plane in 2017, and therefore its entire fleet of 36 planes is new and is not due for replacement for a long time.
The average age of Air India’s fleet is just 2.5 years, and therefore, a large number of the 113 planes have lots of life ahead before they are retired. The oldest planes in the fleet are A319-100 planes acquired in 2007, while most new generation planes currently operated by the airline were inducted in recent years.
Manish Tewari further countered by asking why Air India downsizing rapidly if it is expanding its fleet. Ignoring the plain arithmetic that 470 planes can’t be a replacement for 113 planes, he stuck to the point that more aircraft does not mean more jobs.
Then why is @airindiain downsizing so aggressively? If you are rapidly ramping up capacity you need experienced people to run an upscaled operation. Trajectory is in reverse. For their employee to aircraft ratio is adverse. More aircraft’s will not mean more jobs.@KanchanGupta https://t.co/gcWMoGFsCu
— Manish Tewari (@ManishTewari) February 16, 2023
The fact is, Air India has just announced the aircraft order, and no plane has arrived yet. It will take time for the manufacturers to start delivering the ordered aircraft. The delivery of the aircraft will start later this year, and this will go through several years. As and when new planes arrive, the airline will induct manpower. There is no point in recruiting people in advance when there are no additional planes yet to operate.
Moreover, correcting the employee-to-aircraft ratio is a business decision to make sure that the airline remains profitable. As a government enterprise, Air India was overstaffed, which was corrected through VRS schemes in recent times when it was under the government. Air India will definitely need more people to run more planes, but as a profit-oriented private enterprise, it will recruit people as per requirement.
