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As Biden, Macron, Sunak thank India for historic aircraft orders, read how Nehru and his socialist policies had ruined Air India’s growth trajectory

On Tuesday, Air India entered into a historic deal and signed letters of intent with Airbus and Boeing to acquire as many as 470 Boeing and Airbus planes.

On February 14 (local time), Prime Minister Narendra Modi, President of the United States Joe Biden, Prime Minister of the United Kingdom Rishi Sunak and President of France Emmanuel Macron remarked on the historic multi-billion deals between Air India, Boeing, Airbus and Rolls Royce. The remarks came after India’s flagship carrier and part of the Tata Sons conglomerate Air India announced its plans to acquire widebody and single-aisle aircraft.

In an official statement, the White House said that President Joe Biden and PM Modi spoke to discuss the historic agreement of Air India to purchase over 200 American-made aircraft from Boeing. President Biden noted the deal would support over one million jobs in America across 44 states. They also discussed the importance of the strategic technology partnership between the two nations.

The White House’s official statement on Air India-Boeing deal. Source: The White House

In a tweet, PM Modi said, “Glad to speak with President of the US Joe Biden. Excellent discussion to review the ongoing and new initiatives to deepen India-US Comprehensive and Global Partnership further. We welcome the landmark Air India Boeing agreement, which will help create new opportunities in both countries.”

In the official statement, PMO said that PM Modi and President Biden had a warm and productive phone call. Both leaders expressed satisfaction at the deepening Comprehensive Global Strategic Partnership between the two nations that have resulted in robust growth in all domains. They welcomed the landmark agreement between the two companies as a shining example of mutually beneficial cooperation that will help create new employment opportunities in both countries. PM Modi also invited Boeing and other US companies to use the opportunities arising in India due to expanding civil aviation sector.

Commending the Air India-Airbus deal, France’s President Macron said in a tweet, “The contract that Airbus and Tata Sons signed this morning marks a new stage in India and France’s strategic partnership. Thank you, Narendra Modi, for your confidence in France and our industry.”

During the call with PM Modi, he said, “I am confident that our bilateral relations will touch even greater heights this year. Under India’s G20 Presidency, we will have more opportunities to work together. Once again, many thanks and best wishes to all of you.”

In a tweet, PM Modi said, “I thank my friend Emmanuel Macron for joining me at the launch of an important partnership between Air India and Airbus that will further strengthen the Indian aviation sector and create opportunities in both nations. This reflects the robust Indo-French Strategic Partnership.”

During the call, the PM said, “The deal is a testament to the deepening relationship between India and France and the successes and ambitions of India’s civil aviation industry. Today, our civil aviation sector is an integral part of India’s development. Strengthening civil aviation is an important aspect of our National Infrastructure Strategy. In the last eight years, the number of airports in India has jumped from 74 to 147, almost double the increase. Through our regional connectivity scheme (UDAN), remote parts of the country are also getting linked via air connectivity, which is promoting the economic and social development of the people.” He added that in the next 15 years, the number of aircraft in India is estimated to be more than 2,000.

Prime Minister of the UK Rishi Sunak also reacted to the deal. In a tweet, quoting the reports of the deal, he said, “This is one of the biggest export deals to India in decades and a huge win for the UK’s aerospace sector. With wings from Broughton and engines from Derby, this deal will support jobs around the country and help deliver one of our five priorities – growing the economy.”

Nationalisation of Air India and how it lost its charm over the years

On January 27, 2022 Tata Sons officially took over Air India, AI Express and AI SATS after the government transferred 100% shares to Tata’s wholly-owned subsidiary Talace Pvt Ltd. Former chairman of the Tata Group shared an emotional message and wrote, “Welcome back, Air India”.

He wrote, “wrote, “Tata Sons winning the bid for Air India is great news. While it will take considerable effort to rebuild Air India, it will provide a very strong market opportunity for the Tata Group’s presence in the aviation industry.”

Notably, the story of Air India began in 1932 when JRD Tata laid the foundation of Tata Aviation Service, then known as Tata Air Mail. Tata’s fascination for the airline business began in 1927. In 1929, when Flying Club opened in Mumbai, he spent hours mastering the art of flying a plane. The first cargo flight under his company was flown by Tata himself from Karachi to Madras, on which he carried 25 KG of airmail. In just five years, his company made over Rs 6 lakhs worth of profits.

In 1938, he changed the name to Tata Airlines. Soon after World War II broke out, and British Government took control of all the aircraft owned by Tata. He regained control after WWII was over. In 1946, the company was renamed Air India.

In 1947, Tata laid down a proposal to the Congress government to acquire a 49 per cent stake in Air India Ltd with a provision to increase it by 2 per cent in later stages. Tata Group was to hold 25% ownership of the company while the rest was to be publicly traded.

Notably, Tata was not a fan of nationalisation. In a statement, he had said, “There is an overwhelming case against nationalisation of India airlines”. By 1948, the Nehru-led Indian government held a 49% stake in Air India Ltd. JRD Tata was unable to fathom the drastic move by Nehru, which was to wreak havoc on the airline industry and the empire he built.

In 1953, the Indian government decided to nationalise Air India and the airline industry. In his own words, Tata recounted, “(I was) indignant at how the government had treated the air transport industry.” Notably, Nehru did not consult the Tata group before nationalising the airlines. “(The government was) driven to the conclusion that there was no other way out except to organise [the airlines] together under the State,” Nehru claimed in a letter to JRD Tata.

In his remarks, Tata said, “My friend Nehru stabbed me in my back. I can only deplore that so vital a step was taken without giving us a proper hearing.” The once successful private player in the airline industry was reduced to a loss-making venture. With subsequent government interference and bureaucratic red tapeism, Air India ended up with an accumulated loss of ₹80,000 crores.

In his parting note, JRD Tata said, “And now the time has come to say goodbye. As we turn the last page and put away the book, regret or bitterness has no place in our hearts. Instead, we may find content in the thought that what we did was worth doing, that we set our standards high and would not lower them, that we never need part with our memories….” From being an excellent aviator to pioneering India’s first airline enterprise to losing his dream and hard work to the government, JRD Tata saw it all in his lifetime.

Tata’s announcement to buy a fleet of aircraft to expand its aviation business

According to an official release, the order comprises 40 Airbus A350s, 20 Boeing 787s and 10 Boeing 777-9s widebody aircraft, as well as 210 Airbus A320/321 Neos and 190 Boeing 737 MAX single-aisle aircraft.

The A350 aircraft will be powered by Rolls-Royce engines, and the B777/787s by engines from GE Aerospace. Engines from CFM International will power all single-aisle aircraft.

Commenting on the occasion, Tata Sons and Air India Chairman N Chandrasekaran said, “Air India is on a large transformation journey across safety, customer service, technology, engineering, network and human resources. A modern, efficient fleet is a fundamental component of this transformation. This order is an important step in realising Air India’s ambition, articulated in its Vihaan.”

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