| Boeing Dreamliner 787, ordered by Jet Airways
It felt good to be an Indian in Seattle last week. Take, for instance, a panel discussion covered by about 270 journalists from all over the world: the panellists were chief executives of some of the leading airlines in the world, including Australia’s Qantas and one of China’s aviation successes, Shanghai Airlines.
Moderating the discussion, Boeing’s vice-president for marketing spoke of China as the market with the biggest potential for aircraft manufacturers. When his turn came to speak, V. Thulasidas, chairman and managing director of Air India, confidently disputed that assertion. “India is the fastest-growing market” for aviation, he told the large audience and nobody disagreed. Not even Zhou Chi, the feisty executive chairman of Shanghai Airlines.
Boeing is to Seattle what Tata Steel is to Jamshedpur. But this boomtown is also home to Microsoft, Starbucks, Costco, the largest membership warehouse club chain in the world, and Amazon.com, one of the first major companies to sell goods over the internet, to mention a few. ‘India shining’ may be a slogan that is derided within the country because the Bharatiya Janata Party made it the fulcrum for its 2004 election campaign. But in the corporate boardrooms in Seattle, India is truly shining.
The Trade Development Alliance of Greater Seattle, which includes the neighbouring, prosperous counties of King, Snohomish and Pierce, was among the first in the United States of America to identify the future growth potential of India way back in 1996 with a pioneering county-level business mission to New Delhi, Mumbai, Bangalore and Chennai. That was a time when no more than lip service was being paid to Indo-US relations unlike today. Last week, it was Air India which was holding the baton in India’s name in Seattle. Its $11.6 billion order with Boeing for 68 new planes is the biggest order in the history of the American aircraft manufacturer.
Days earlier, Jet Airways wowed the annual Paris air show when it displayed its new aircraft to be put into service on the Mumbai-Brussels-New York sectors from August 5. The plane has eight private first class cabins, like private bedrooms and private dining rooms, which add up to having your own private suite in the sky. At Boeing, executives who keep an eagle eye on airlines around the world, say there is amazement in the aviation world that a carrier from India — not south east Asia, which is famous for its airline services — is offering such luxury. Jet Airways has ordered 30 planes from Boeing since August 2005, including 10 of the 787 Dreamliner series rolled out of the manufacturer’s Seattle plant with great fanfare on Sunday.
But it is not just Air India and Jet Airways that are spearheading a buying spree for planes — which could be leveraged by an imaginative government in New Delhi into an instrument for its diplomacy. IndiGo Airlines made a splash when it announced at the Paris air show in 2005 that it will buy as many as 100 Airbus 320 planes. Kingfisher Airlines has already ordered the double-deck Airbus A-380, the largest passenger airliner in the world, commonly called ‘SuperJumbo’, in addition to 10 other types of Airbus aircraft. SpiceJet, the low-cost carrier, has placed orders for 30 planes with Boeing between February 2005 and April this year.
At Boeing, a recent analysis of the current market outlook for aviation has concluded that India will need 856 additional commercial planes in the next 20 years. Its cost: a mind-boggling $72.6 billion. Dinesh Keskar, senior vice-president of Boeing in charge of the sale of commercial aeroplanes, says that there is a direct correlation between a country’s gross domestic product increase and growth in aviation passenger traffic. Conventional wisdom in the airline industry is that the growth in air travel is usually twice the rate of increase in GDP. Add to that statistics which show that only three per cent of India’s population now uses air for their regular long-distance domestic travel. Thulasidas jokes about Air India’s huge purchase from Boeing that earlier India used to order six or eight planes at a time: “Now our order is for 68 aircraft instead.”
Perhaps as the result of a new confidence now in evidence in Indian civil aviation, moves are afoot to get rid of one of the last vestiges of colonial rule in the country’s collective public persona. In 1944, after the creation of the International Civil Aviation Organization, India was allotted the code VT for the registration of its aircraft. Planes owned by Air India and other carriers still fly with the VT registration numbers on their tail. VT stands for ‘Viceroy’s Territory’. Thulasidas and the chiefs of several private airlines want the government to persuade the ICAO to replace the colonial-era code with one that is more in tune with the country’s present standing. New Delhi is in the process of taking this up with the ICAO.
Besides such symbolic dwelling on national pride, there is much more that the government and the country’s aviation industry can do together in external affairs. Assuming that the projected orders for 856 new planes by Indian companies are divided up more or less equally between Airbus and Boeing, that will still mean orders worth approximately $36 billion for Boeing in the next 15 to 20 years. Imagine the number of jobs in the US that will be created or sustained by the infusion of Indian money on that scale.
With the next US presidential campaign revving up, several White House aspirants are once again trying to drum up controversy about the outsourcing of American jobs to India. Notwithstanding the huge support that the Indian American community appears to be showering on Hillary Clinton at this stage of her campaign with their money, network and material, the Democratic front-runner has been put on the defensive on the issue of outsourcing. The impact of an outreach blitz in the US jointly by New Delhi and its public sector and private airline companies, highlighting the jobs India can help create in America because of the 400-plus planes that would be bought from Boeing over the next several years, would be to considerably douse the emotions aroused by the outcry over outsourcing. So far, however, the government has opted, instead, to concentrate on the economic and technical leveraging that its orders can bring to India in exchange.
Boeing is already committed to investing $185 million in India in an aircraft maintenance, repair and overhaul facility, to be run as a business venture along with Air India, plus a centre to train pilots and thus overcome the severe shortage of men and women who fly aeroplanes. Because the government has negotiated with far-sightedness, Boeing is also helping to enhance the capabilities of flying schools in India in addition to agreeing to offsets equivalent to 30 per cent of Air India’s order for new planes.
In 1991, the US aircraft manufacturer started a small effort to procure material for its aircraft from Hindustan Aeronautics Limited. In the coming years, that project will be greatly expanded: projections are that Boeing intends to source goods and services worth at least $1.7 billion from India for its production lines in Seattle.
There is irony in all this. Air India was almost written off as an airline some years ago. Now it is leading the surge in the country’s civil aviation. Thulasidas has used his earlier experience in the civil service as an under-secretary in the civil aviation ministry, director of tourism in Kerala and joint secretary in the defence ministry in charge of air. He has transformed himself in the four years that he has been Air India’s chairman and managing director into an airline chief executive who has won international respect and acclaim. That was very obvious during his presence in Seattle in connection with the Sunday launch of Boeing’s new 787 Dreamliner.
It will be a landmark when Air India’s new 777-200-LR aircraft lands in New Delhi, possibly to be received by the prime minister, Manmohan Singh, in little over a fortnight. The last time such a new aircraft landed in India was in 1996 when Air India bought its 747s. Old-timers at Boeing recall that in 1962, Air India earned the distinction of being the world’s first all-jet airline. And in the Sixties, Boeing delivered the first of its Jumbos to the airline. That history made sense for Indian civil aviation when Thulasidas said in Seattle last week that his mission as the first head of the merged Indian mega flag-carrier would be to copy the model of Air India in those good old days.