HomeAviation NewsBoeing expects supply chain issues to continue for next 1-2 years, plans to add more Indian suppliers

Boeing expects supply chain issues to continue for next 1-2 years, plans to add more Indian suppliers

Boeing is not only selling planes to Indian carriers but also making several components in India and exporting them from here as well. The American manufacturer plans to make India one of its key suppliers at a time when global supply chain constraints continue to affect delivery timelines.

By Madeeha Mujawar  February 6, 2023, 6:38:17 PM IST (Updated)

With India's air passenger traffic bouncing closer to pre-COVID levels, airlines are taking steps to expand their capacity to meet growing demand. That has meant adding more aircraft to the fleet or replacing the old ones and this augured well for the world's leading aircraft manufacturers like Boeing.

"India will need 2,200 more aircraft for its commercial fleet in the next 20 years...expect a significant slice of India's aviation market," said Brendan Nelson AO, President of Boeing International in an interview with CNBC-TV18.

Nelson said many of Boeing's customers are going through fleet renewals to increase sustainability, reduce greenhouse gas emissions and modernise the fleet for efficient operations.

Boeing is not only selling planes to Indian carriers but also making several components in India and exporting them from here as well. The American manufacturer plans to make India one of its key suppliers at a time when global supply chain constraints continue to affect delivery timelines. Boeing has invested $1 billion with 300 Indian suppliers and plans to bring many more on board.

"We are bringing new suppliers to our supply chain, making sure we deliver when we promised to deliver. The supply chain issues will continue to challenge the industry at least for the next 1-2 years,” Nelson said. He also cited the challenges faced by engine manufacturers, electrical component and computer chip makers who are struggling to meet the demands of aircraft manufacturers including Boeing, though he said the firm was managing the supply chain issues very effectively.

Air India, the oldest customer for Boeing in India, is believed to have sealed a large aircraft deal with the US aviation giant but both sides are yet to make any announcements.

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"We will be making some announcements at Aero India... will also be making some announcements following commercial negotiations that we have been involved with and will make further announcements about expansion of the supply chain," Nelson said.

Boeing not just makes commercial planes but also defence aircraft. The company along with the Tata Group owns a 14,000 square meters manufacturing facility in Telangana where the companies are producing fuselages helicopters AH-64 Apache, secondary structures and vertical spar boxes for customers worldwide.

The company has built nearly 200 Apache helicopter fuselages at this facility. The first of the six AH-64 Apache attack helicopters ordered by the Indian Army were delivered in January this year. Nelson said the Telangana facility is also equipped with making other types of planes.

“We are offering to the Indian government Block III Super Hornet,” he said, adding that the firm also has autonomous vehicles and aircraft weapons systems that it will offer to the government.

Also Read: Air India set to seal half of jumbo plane order, CEO says airline made 'quite remarkable progress'

Meanwhile, Boeing is also focusing on sustainable flying given the steep cost of Air Turbine Fuel as well as high carbon emissions.

“Aviation is 2.6 percent of global greenhouse gas emissions. Our mission is to get to net zero by 2050 and the quickest way to reduce greenhouse gases is to purchase new aircraft. Boeing is investing very heavily in various facilities around the world in developing sustainable aviation fuel, we are also working on electrification which will certainly come in the near term for smaller aircraft to shorter flights," Nelson said.

The aircraft maker is confident about a strong recovery and demand in the aviation sector and expects that to reflect in its financial performance.

"Last year we had $66.6 billion in revenue & free cash flow of $3.1 billion, we expect $100 billion in revenue & $10 billion dollars in free cash flow in 2025-26," Nelson said.

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