While it’s been an open secret that Air India has been about to purchase nearly 500 aircraft in an order split between Boeing and Airbus, the Airbus order was announced… but we were waiting for the order from Boeing. The reason why the two orders weren’t announced together is now clear. It awaited President Biden so that he could be a part of the announcement.
Here comes part 2:
President Biden will announce Boeing and Air India have reached an agreement for Air India to purchase 190 Boeing 737 MAXs, 20 Boeing 787s, and 10 Boeing 777Xs, according to a White House official. https://t.co/9Y31kODSIA
— Anurag Kotoky (@anuragkotoky) February 14, 2023
This purchase will support over 1 million American jobs across 44 states, and many will not require a four-year college degree, said President Joe Biden. “This announcement also reflects the strength of the U.S.-India economic partnership. 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.
This is the third largest aircraft order by list price dollar value and second largest by aircraft quantity. And involving political leadership is certainly not unique to this administration. And President Biden’s announcement helps Boeing. It even sends the signal to others around the globe that ordering from Boeing wins credit with the U.S. government.
While Air India is now a private company, it’s certain that delivery slots aren’t the only reason they’re splitting their order between the two largest airframe manufacturers. They’ll operate Airbus and Boeing narrowbodies, Airbus A350s and Boeing 787s for long haul and they’re even committing to the long-delayed new Boeing 777 project that hasn’t seen broad interest in years (albeit just for 10 aircraft, and we don’t know how how many of the planes they’ve ordered will ultimately be firmed and delivered).
Indeed, there’s a reason Boeing decided to move its headquarters to the DC area, after the subsidies it received in Chicago ran out. They know that their business success relies on being an artifact of the state – from regulatory concerns over their safety practices, to defense contracting, to leveraging federal diplomacy to sell airplanes (and receiving subsidies, such as via the Export-Import bank for those).
And the decision to buy airplanes is almost always political. They are very large, high profile purchases that get media coverage. Many carriers around the world are state-backed. And even in the U.S. where airlines are making mostly economic decisions about aircraft purchases, P.R. effects (imagine Seattle-based Alaska dropping Boeing!) and international trade considerations (where a plane is built, whether the price is subsidized, and ultimately whether the manufacturer will be able to deliver given these geopolitical issues) come into play.