India Lagging Behind

Brazil could also come up with a new and larger airliner, leaving India as the sole member of the potentially world-beating BRIC group of nations, with a glaring dependency on foreign aircraft manufacturers

Which nuclear power aspires to put an astronaut in orbit, and perhaps even land on the moon, but has so far not produced a single airliner? The answer is India. Each of the 400 or so aircraft on the inventory of the country’s airlines is procured from abroad.

According to the Centre for Asia Pacific Aviation (CAPA), Russia and China are separately developing next-generation aircraft programmes with the launch of the MC21 (Irkut/UAC) and C919 (Comac/AVIC) narrow-body programmes, respectively, to challenge Airbus and Boeing, whose aircraft are increasingly dominating their home markets. Brazil—no stranger to domestic aircraft production—could also come up with a new and larger airliner, leaving India as the sole member of the potentially world-beating Brazil, Russia, India, China (BRIC) group of nations with this glaring dependency on foreign aircraft manufacturers.

It might seem unfair to compare India with Russia or China, but take Brazil. Around four decades ago, Brazil was similarly placed with no aerospace industry worth the name. The government, determined to do something about it, established Embraer in 1969. Progress was slow to begin with—agricultural aircraft, small training aircraft and gliders were Embraer’s stock products. Two decades passed before its first regional jet took to the skies. The company was privatised in 1994 and it was only in the last decade that it began to make a mark on the global scene with its E-Jets series and world class Business Jets. Embraer is now ranked as the third largest manufacturer of commercial aircraft in the world. Even giants like Airbus and Boeing keep a wary eye on it. Could there be a better model for India?

Grand Growth

Commercial aviation in the Asia-Pacific region is growing rapidly. Boeing estimates that over the next 20 years the region’s airlines will acquire around 9,000 new aircraft, shelling out an estimated $1.2 trillion (Rs.56,06,636 crore). Strong demand for single-aisle planes in India and China mean that about 5,600 of these airliners will be narrow-bodies. At present, Boeing, Airbus, Embraer and Canada’s Bombardier compete in this segment. By 2016, the Chinese, Japanese and Russian manufacturers are likely to enter the fray. Why not India then? According to Anand Mahindra, India’s huge domestic aviation market gives it a “tremendous home-base advantage”. He feels that it is important for Indian businessmen to understand that the big domestic market “allows us to become world-class players.”

The potential of the country’s airline industry is staggering. Last year, Boeing projected an Indian demand for 1,000 commercial aircraft worth $100 billion (Rs.4,60,000 crore) over the next 20 years. Airbus estimates 1,032 aircraft worth $138 billion (Rs.6,34,800 crore) over the same period—making India the world’s fifth largest market. And at India Aviation 2010 held in March, the ever-optimistic Praful Patel, the Civil Aviation Minister said, “I don’t think a great country in geography and size like India can do with less than 2,000 to 3,000 planes in the next 10 years.” He also felt that India needed at least 400 airports to keep pace with the growing demand. The logic is irrefutable. Since the country currently has a woefully low aviation services penetration rate, such figures may not be overstated.