Boeing secures huge Air India order

Air India has placed one of the largest orders in aviation history, with both Boeing and Airbus receiving massive orders. On Tuesday, President Joe Biden announced Boeing’s order of 220 firm jets, the third largest sale for the company.

The order includes 190 Boeing 737 Max single-aisle planes, 20 of its 787 Dreamliner widebodies, and 10 of its 777X widebody jets. Boeing’s order was valued at $34 billion and includes an option for Air India to purchase another 50 Boeing 737 Max’s and 20 Boeing 787s. At a 50% discount, the order would be valued at $17 billion. Airbus also announced orders for 250 jets, with a value of nearly $38 billion.

The purchase includes 140 A320neo and 70 A321neo single-aisle planes, along with 34 A350-1000 and six A350-900 widebodies. Despite the massive order for Boeing, Airbus continues to dominate the narrow-body, single-aisle jet market, leaving Boeing at a competitive disadvantage.

The global airline industry is expected to return to profitability this year for the first time since 2019, as global air traffic is expected to boom and return to pre-pandemic levels in June. Boeing has suffered significant financial losses over the last four years, which makes this order an important lift to the company. With a backlog of nearly 4,600 jets, the company is expected to benefit from the global airline industry’s plans to make new purchases as they climb out of years of losses. The manufacturing split between Boeing and Airbus is expected to keep the two companies equally busy, with both enjoying a significant backlog of orders.

In a statement, President Biden said that the sale would “support over one million American jobs across 44 states, and many will not require a four-year college degree.” Biden added that “together with Prime Minister Modi, I look forward to deepening our partnership even further as we continue to confront shared global challenges — creating a more secure and prosperous future for all of our citizens.”

While both Boeing and Airbus are expected to benefit from the orders, Boeing has had a particularly difficult couple of years, including the 20-month grounding of its best-selling 737 Max following two fatal crashes. Boeing’s Air India order has an economic impact of $70 billion across the United States, with three separate US-based manufacturing lines expected to support an estimated 1.47 million direct and indirect jobs.

India is set to become the world’s most populous country this year, and its massive and cheap labor force, which includes workers with key technical skills, has become a big draw for manufacturers. As a result, India has been gaining some manufacturing business as Western tensions flare with China. The country’s growing domestic market offers a significant opportunity for manufacturers. According to the Centre for Economics and Business Research, if India can sustain its momentum, it could become only the third country with GDP worth $10 trillion by 2035, after the US and China.