Credit: Special Arrangement
New Delhi: India’s biggest carriers Air India and Indigo placed orders for 970 aircraft between contributing $120 billion to order books of the two OEMs - Airbus and Boeing. Other airlines have also followed, enthusing a lot of interest in the burgeoning Indian aviation sector. Air India’s privatisation and its subsequent order placement was the pivotal point for Indian aviation, observes Boeing’s India president, Salil Gupte, who sat down with DH’s Lavpreet Kaur to discuss the status of Indian aviation sector and its growing contribution to the global scenario.
Edited excerpts from that conversation.
What inroads has India made into Boeing’s supply chain?
India has been able to marry its historical strength in engineering, with its more recent growing strengths in quality manufacture, which have really come up splendidly over the last decade. From floor beams of 787 to Apache’s fuselage to 737-Max’s fin to P8’s interiors, all are already being made in India. Around 300 different suppliers, mostly MSMEs, have been tapped for these initiatives. In the coming years, India will move up the value curve from very basic simple assemblies to complex ones and work with advanced composite materials.
How has India fared in critical parts manufacturing though?
It has improved markedly over the last 10 years. The global supply chain in many industries, including aviation is very stressed and is not performing at its historically strong levels seen before the pandemic. The Indian supply chain, however, has been performing at a far higher level than the rest of the world. So we need India to continue to perform at those high levels. One can expect Indian companies in the future to attain a ‘sole source’ position.
What kind of policy support would you seek to this end?
Make-in-India is not just about manufacturing, it is about services too. In India, when we think of services, it is always about IT and outsourcing but services in aviation are incredibly important, like MRO (maintenance, repair and overhaul) and the maintenance of airplanes. They can be done in India at a very high calibre and at a reasonable cost. However, it requires significant investment by the local players.
Tier-I OEMs like Boeing or Airbus would invest in India only if the policies align with other global hubs like Dubai and Singapore. We're working closely with the government on them.
How do you see the demand for narrow and wide-body aircraft?
The passenger demand is going to be there on the narrow-body side. As GDP grows and Indians become wealthier and value their time, in different ways air traffic will grow.
On the wide-body side, it is at an inflection point, with a very well-capitalised player like Air India, who can place huge orders for wide bodies and wide-body technology that can go efficiently long distances in a way never before. Planes like B787 can efficiently take people from Delhi to Vancouver, Chicago or Washington DC and can even take people on a regional basis at the lowest seat-mile costs of any airplane out there. So, there's no need for an Indian passenger to connect to the hubs now and I think that is going to be a change for the Indian widebody market.
Where does India stand in the global aviation business?
Over the next 20 years, this region is going to take more than 2,400 aircraft. In the same period, globally there will be upwards of 40,000 aircraft coming in. That tells you there is a long way to go and India’s still a single-digit number of that overall global market. India will probably grow to have a double-digit share in the future and become a massive hub for aviation activity. We are in the take-off period.
How many aircraft are coming in or are expected to be delivered?
We don't give an exact number out. What I can say is, on average, between both OEMs (Airbus and Boeing), India will have weeks where there will be more than two aircraft getting delivered over the next year and a half.
The aviation industry is negotiating airline shutdowns, pilot shortage and other concerns about the service ecosystem. What will be the trajectory going forward?
The development of the airline industry is never really a straight line. India's market has rationalised. Private players and well-capitalised airlines are now in the space. So we will see more stability going forward.
When it comes to the ecosystem, on MRO and pilots, we're doing all we can to ensure that capacity. Safran’s MRO facility in Hyderabad will go a long way towards having engines maintained in India and we've made good strides on components repair too with the MoU with ASL for landing gear and with Spirit and GMR for component repair and overhaul.
What's your reading on the airport infrastructure in India?
We're going to be running into capacity limits at airports of some of the major metros within the next few years and new airports coming up in Noida and Navi Mumbai are going to be just as important as all of the smaller airports. Looking at the next 10-15 years we need more of these airports to come up in major metros and tier-2 cities. In major US or European cities, they all have 4-5 major airports, that's really what is needed in India.