Can India build passenger planes like Boeing and Airbus?
PM Modi recently said India will soon manufacture large passenger aircrafts. The country's aerospace industry is set for a paradigm shift. Will the dream of a made-in-India passenger plane take off?
Those subtle manoeuvres before the abrupt halt. And then the sudden jolt and a burst of engine thrust. That feeling of being pushed into your seat as the aircraft accelerates down the runway. And then, that sensation of weightlessness during the take-offs. Taking to the skies is always exhilarating. And as you do so, you often find yourself wondering what it would be like to be in the cockpit. You marvel at the amazing feet of engineering that aircraft are. Some of you may also ask, will we ever get to fly on a Made in India plane?
Prime Minister Narendra Modi answered that question last month. He said that India would soon be manufacturing large passenger aircraft. He added that they would also be marketed across the globe. The statement came at the foundation stone ceremony of a Tata-Airbus manufacturing facility in Gujarat.
The PM could have meant two things. We could convince foreign civilian aircraft makers to set up a final assembly line in India. It is an exclusive club. Airbus and Boeing form a virtual duopoly in the global market. The likes of Bombardier, Embraer and Tupolev make up the rest of the industry.
Or, we could design and build an Indian passenger plane from the ground up.
The head of a major Indian aerospace company says that asking Airbus or Boeing to establish a final assembly line in India would be easy. A final assembly line is justified if it churns out at least 5 to 10 aircraft a month and there is an overall demand for about 120 a year. The industry expert says that level of consumption is possible between the airlines India has today, especially when the outlook for the coming decades is bullish.
The Indian aviation market will need an estimated 2,200 new aircraft between 2022 and 2040, a three-fold jump from the country's commercial fleet at present. That's just a shade below what all the Latin American airlines will need in that same period and about 65 per cent of the entire Middle East region's projected demand. And, while China will need almost four times as many new aircraft by 2040, Beijing’s home-grown civil aircraft may prove to be a threat for Boeing and Airbus in that market.
In the past, China also took this route. In 2008, Airbus inaugurated its first final assembly line outside Europe in Tianjin. A decade later, Boeing opened a completion and delivery centre for its 737 family of jets in Zhoushan.
But, the industry expert from before cautions that a final assembly line will end up importing major components, as is the case for similar ventures elsewhere. He adds that it will create few jobs and lead to little value addition beyond what the Indian aerospace industry is already doing for global OEMs.
For instance, Boeing sources 1 billion dollars in products and services from India annually. While its network of over 300 Indian suppliers is growing, the company is also investing in a 200-million-dollar centre of excellence in the country. Airbus says that every commercial aircraft built by it is partly designed and made in India. The company sources 650 million dollars in manufactured parts and engineering services every year from over 45 Indian suppliers.
Giving this ecosystem wings could go a long way towards building a truly Indian passenger plane. And, Aravind Melligeri, the chairman and CEO of Aequs, one of India’s major aerospace manufacturers, has a roadmap in mind. Melligeri says the government must ask Airbus and Boeing to significantly increase their sourcing from India. As a result, Indian suppliers will move up the value stream. According to Melligeri, this will ultimately enable India to not only assemble a complete aircraft for Airbus or Boeing, but also for itself.
[Video byte of Aravind Melligeri]
Yes, they will. The government must point out to them how much they earn from India.
Nonetheless, Melligeri cautions that it could still take 30 years for India to have its own large, turbofan engine-powered passenger plane in the skies. Even Airbus and Boeing take over 10 years to execute a clean sheet programme.
However, the real hurdle in building a designed and made in India passenger plane will be the money needed.
After being in development for over a decade, Beijing’s first home-grown passenger jet, the C919, won Chinese regulatory approval in September. The narrow-body airliner is seen as a symbol of national pride. But, one US think-tank estimates that it has come at an astonishing cost. To smooth over the C919's development, the Commercial Aircraft Corporation of China may have received between 49 billion and 72 billion dollars from the Chinese government between 2008 and 2020. In comparison, India will spend less than three-fifths (29 billion dollars) of the lower end of that amount on the production-linked incentives scheme in key areas over five years.
However, India need not break the bank by following China’s example. That is if it can right-size its ambitions, in line with its requirements. Melligeri explains that India is not a very large country from an air distance perspective. The duration of domestic air travel is mostly under two hours and point to point. Thus, according to Melligeri, the ideal aircraft for India to start with would be a turboprop.
[Video byte of Aravind Melligeri]
But, turboprop typically has a smaller capacity, but we have a large population, for which you need a large aircraft. A revolutionary way of looking at it is if there is a potential of a large turboprop aircraft, which would be efficient for India potentially because the distances are very small.
If India’s aim is a home-grown passenger plane that can compete with China’s, then Rossell India Director Rishab Gupta says that the participation of both a strong government entity and the private sector will be needed. Tie-ups with global OEMs may also prove necessary. Rossell Techsys was the first Indian manufacturing company to win the 'Boeing Supplier of the year' award. It accomplished this feat twice in the past five years.
Gupta adds that it will be a capital intensive venture, requiring grants, incentives and subsidies from the government. He also suggests a review of the tax structure on raw materials, which are mostly imported at present, to encourage more local content.
An Indian designed and built passenger plane will be a mammoth undertaking, with plenty of turbulence likely. But, the industry insiders who spoke to Business Standard unanimously believe that India has to make a start, sooner than later.
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