Opinion The Express View on TATA aircraft deal: Wings of desire

Around a year after it returned to the TATA fold, Air India, on Tuesday, announced that it had placed an order for 470 aircraft from Airbus and Boeing. The deal, which is the biggest in aviation history surpassing the American Airlines deal in 2011, is meant to modernise the airline’s fleet and expand its network. As per the timelines laid out by the company, the first new aircraft will enter service in late 2023, with the bulk expected to arrive from mid-2025 onwards. A re-energised airline will expand the choices before the consumer, increasing competition in the domestic market where it will take on market leader, Indigo, and in the international travel market, challenge the dominance of Middle Eastern carriers.

After witnessing traffic collapse during the pandemic, India’s aviation market has seen a sharp pick up. As per data from the Directorate General of Civil Aviation, the country’s domestic air traffic rose to 127.35 lakh passengers in December 2022, up 13.7 per cent from 112.02 passengers over the same period last year. With more than half the market share, IndiGo leads the pack, followed by Air India and Vistara. Currently, Air India is reported to have 115 aircraft. While including other TATA group airlines such as Vistara, the number of aircraft under the group is higher, its active fleet is lower than that of Indigo. However, considering that this new order is more than the existing capacity of the entire group, it will help boost Air India carry capacity significantly, placing it in an extremely challenging position. Moreover, this aircraft capacity expansion is also in line with the government’s priority of expanding physical infrastructure to greatly enhance connectivity across the length and breadth of the country. The number of airports in the country has risen from 74 to 147 in the past eight years. And the recent Union budget mentioned that “50 additional airports, heliports, water aerodromes and advance landing grounds” will be revived across the country.

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Such deals also serve to emphasise the growing size and strength of the Indian economy. They underline the attractiveness of India as a market, and an investment destination — the country is, after all, on path to becoming the third largest economy in the world. But this growing economic heft also adds to diplomatic heft. Considering the manner in which the deal has been celebrated on both sides of the Atlantic — US President Joe Biden has called the deal a “historic” one, French President Emmanuel Macron has hailed it as a “new success”, and said there was a “historic opportunity” to come together, while British Prime Minister Rishi Sunak welcomed the “landmark deal” — this growing economic clout will create greater space for India to negotiate more favourable terms for itself in international negotiations, leverage situations to its advantage, and assert itself on the global area.