India

NEW DELHI: Boeing is “looking at the business case for having a final assembly line (FAL) in India” and Prime Minister Modi’s recent US visit has “certainly laid the groundwork for engine manufacturing” in the country.

Boeing India president Salil Gupte has told TOI the US aerospace major is going to ramp up its sourcing from the country from current $ 1 billion annually.

Boeing and Airbus have together bagged firm orders for 970 aircraft worth $120 billion in the last four months alone from Air India and IndiGo.

Boeing may additionally get a significant wide body order from IndiGo which is testing these waters with two Boeing 777s wet leased (hired with operating crew) from Turkish Airlines.“We are looking at the business case for that (having a final assembly line in India)… focussed on increasing sourcing that leads up to that: for components; higher value systems and parts of aircraft.

FAL is relatively small in the overall value chain of an aeroplane, unlike say smart phones or electronics where a lot of value is added in the final step.

It is critical but (represents) less than 10% of the overall value of an aircraft.

Over time as the demand grows in India and for the region we will evaluate the business case for a FAL,” Gupte said.Boeing’s sourcing from India at the moment is over $1 billion (Rs 8,200 crore) per year, of which roughly two-third is manufacturing, making it the biggest original equipment manufacturer (OEM) importer from here.

Over the last 18-24 months it has signed an additional $1 billion worth of contracts.

While these contracts are spread out over several years, the sourcing from India will grow significantly in the next 2 to 3 years.“We have been at the $1-billion level of sourcing from India for the last 2-3 years.

During this pandemic time, aeroplane production rates went down significantly.

While globally sourcing dropped in that period, in India it we stayed flat at a billion dollars.

So you can imagine how fast the growth here was even when aircraft production rates were lower.

Now as those rates increase, India will ride that wave up,” Gupte said.India, the world’s fastest growing aviation market, is keen that both Boeing and Airbus set up FALs here.

With Prime Minister Modi’s push, the country is getting the ecosystem for defence side.

Last year, Tata and Airbus decided to jointly make the C-295 transport aircraft for Indian Air Force in Gujarat.

Modi’s recent state visit to Washington saw US major GE Aerospace signing a pact to jointly make fighter jet engines in India.

These defence aviation ecosystems and supply chains will provide the groundwork for civil side manufacturing and FALs.“The announcement for co-production of military engines in India made during PM Modi’s Washington visit by GE is a big step forward.

That certainly laid the groundwork for engine manufacturing in India.

That’s a great step forward,” Gupte said.

CFM International, GE’s JV with French Safran, is a leading supplier for engines for single aisles including Boeing 737 MAX and Airbus A320neo family aircraft.GE already does substantial manufacturing in India to support those engines, one from a facility near Boeing’s manufacturing plant in Hyderabad which is a JV with Tata.

“We are seeing (engine side) sourcing from India being ramped up.

Even before you get to actual full scale engine manufacturing in India, there is a focus on MRO (maintenance, repair and overhaul) facilities in India.

Airlines need that.

Safran has announced plans to have an engine MRO in India by 2025, especially for the LEAP engines that powers the B737 MAX.

This will be a significant benefit to Boeing customers,” Gupte said.‘$100 million investment primarily on simulator training'When PM Modi was recently in the US for a state visit, Boeing had announced $100 million investment in India.

Regarding that, Gupte said: “India market is growing so fast that it will need tens of thousands of pilots over the next 20 years.

That means there has to be the required training infrastructure in India.

Many students currently go out of India for pilot training and for simulator sessions.

We want as much as possible of that to be done in India.

Much of our announced $100 million investment will go towards the simulator infra; software to support sims and on developing curriculum for training.

We will certainly have our involvement in this but much of that investment will be done via our partnership with CAE.

Some of the investment will happen with Air India as they get into training themselves as well.”





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