From the first flight of the Wright Brothers and Santos-Dumont, aviation has come a long way. During this time, several aircraft models have come and gone. Fast forward to the present day and the ability to produce large commercially viable civil aircraft remains concentrated with two manufacturers: Airbus and Boeing. And consequently with the countries of the US, the UK, France and Germany.
Russia is the only non-Western country to possess considerably advanced aircraft manufacturing capabilities. But even it lags behind the West in terms of advanced material sciences and fuel efficiency.
Another country racing towards building its own civil aircraft is China. With double-digit economic growth for over three decades, it has heavily invested in research and development, with numerous companies involved in the manufacturing of aerospace products. And while China is fast developing the ability to produce a viable, wide-body commercial aircraft, there are some inherent problems of global certifications and general acceptance.
For India, in spite of talent, technology, trade, treaties and a growing user base, there has been a lack of focus on the aircraft manufacturing sector. This need not be the case. The elements required are all present and with the right policy, prescriptions can propel India towards the desired outcome.
Aircraft manufacturing requires large long-term capital commitments
Building an airliner is an extremely complex task. It requires diverse skills and workstreams to be brought together. There is no room for error. From materials science to aerodynamics, from design to avionics and from bio-mimicry to physiological factors, all elements must perfectly align in this mammoth industrial undertaking.
If the complexity is not a deterrent, there is also the cost of aircraft programs. Over time, these have ballooned. Sample these: the Boeing 747 program, which in adjusted terms, would cost $7 billion today. The development cost of the 787 is estimated north of $25 billion (due to a clean sheet design). The A380 program cost S25-$30 billion while the Boeing New Middle of the Market Airplane program (NMA) is pegged upwards of $15 billion.
The large capital commitment required combined with the presence of so many known unknowns and unknown unknowns translates to risk. And while that risk carries with it rewards as well, due to a short-term view, the capital commitments are simply not happening. In speaking to the industry investment cycles are short, there is almost no focus on innovation and copying the west continues to be the mantra.
Yet the huge risk and capital commitment also provide an opportunity. And for India with its talent, favourable demographics and geo-strategic involvement, this could provide for a sustainable competitive advantage.
Select program costs and outcomes Source: company filings, some estimates based on production volumes and pricing An aspirational research and discovery base is key
On the research and development front, the nation is left wanting. While some universities offer degrees in aeronautics, the ability to churn out world-class research and the appetite for such research studies is limited.
Compare this to China that has universities such as Beihang University, Nanjing University of Aeronautics and Astronautics, Shenyang Aerospace University and Harbin Institute of technology to name a few. These produce world-class research in addition to that being produced by their own aircraft manufacturers. Russia also has noted institutions such as the Central Aerohydrodynamic Institute (TsAGI) or the Gromov Flight Research Institute, which have also churned out extremely critical studies.
When it comes to aircraft engineering, the research in India is concentrated at the Defence Research and Development Organization. Some research is also undertaken at Hindustan Aeronautics Limited (HAL), ADC and National Aerospace Laboratories (NAL) but it is functional and focused on current challenges. The spirit of innovation, of looking to the future and breaking new boundaries is missing. And new promising talent is simply not taking to these pure research and discovery roles in India. Rather they go and flourish overseas.
The usual retort is that talent certainly exists and the example given is that of the Indian Space Research Organization (ISRO) which continues to break boundaries. But space technology is very different than aircraft technology and it is often confused due to the use of the word “aero-space.”
Space technology indeed has made advances to the point where we are ahead of even Korea and Japan. But on the aeronautical research side, we remain far behind. There simply has not been a focus on the sector.
The lack of focus on the sector also manifests itself in other ways. For instance, India has also not been quick to respond when opportunities present themselves. Once again, an example may be cited of China.
At the end of the Cold War and USSR’s collapse, while India went about hunting for spare parts for its military and strategic aerial assets, Chinese went about hunting for the brains behind the aerospace innovations. China welcomed aerospace experts from Ukraine, Russia, Romania, Poland and other Warsaw Pact countries, providing them with not only regular employment (a rarity during USSR’s collapse), but also liberally rewarded their research and tenure. The research base created by these contract scientists and engineers, along with their intensive cooperation with Chinese researchers, resulted in the establishment of robust aerospace industry, complementing China’s staggering scale of manufacturing.
The lessons learnt offer valuable insights for India. As Prime Minister Modi engages positively with world leaders cementing India’s position as a global player, diplomacy coupled with a core focus on the sector can pave the way for India developing its aircraft-manufacturing capabilities.
A core focus on propulsion technology
India has an advantage in that it has already manufactured aircraft: the Pushpak, Tejas, Hansa, Saras and most recently the NM5. But a closer look at these indicates that the propulsion technology is still sourced from other countries. This is an issue. Because the key to manufacturing commercial aircraft is the ability to produce efficient engines. And without a focus on this in-house, a manufacturer is constrained by both its ability and supply chain limitations.
The focus on propulsion and engine technology is limited. The DRDO has the Gas Turbine Research Enterprise which has worked tirelessly on the Kaveri engine. Interestingly the engine was built to power the light combat aircraft (LCA) but failed to meet technical requirements. A revival is likely as French engine maker Snecma with now work together with GTRE to rectify challenges and fix issues. This as a part of the offsets deal for the 36 Rafale jets.
Much like aircraft programs, the challenge with propulsion technology is that development costs are extremely high. The GE90 program cost north of $3billion in inflation-adjusted terms. The most recent Pratt and Whitney geared turbofan program is estimated to have cost as much as $10 billion. This when the production facilities were already setup and a supply chain already active.
Add to this the fact that aircraft operators the world over demand ever-increasing reliability. As such, one not only has to produce an extremely efficient and technically adept engine but also have large sales volume coupled with after-sales. It is a risk very few are willing to take.
Yet again the huge risk and capital commitment also provides an opportunity. And it is worth repeating that for India with its talent, favourable demographics and geo-strategic involvement this could provide for a sustainable competitive advantage.
A sophisticated supply chain that enables just-in-time inventory
Producing an airliner requires an extremely robust supply chain. As supply chains have become more globalized, the ability to get parts and people on a just-in-time (JIT) basis has become extremely critical. Towards setup facilities, towards assembly line, and towards quality control and certification.
Take for instance the Boeing 787 that uses 26 major suppliers across seven countries. The suppliers range from landing-gear to avionics to aerostructures. Each part has to arrive in time for assembly with stringent quality control mechanisms in place. The competitive environment simply does not lend itself to haggling with customs inspectors on the nature of the parts, the reams of paperwork and lack of accountability.
Partial list of suppliers and parts Source: Company filings
The movement of aircraft parts also calls for sophistication across the supply chain. Everything from airports to roads to custom brokerage houses have to be aligned. For instance, aircraft engines require specialist transport with trucks that have exacting technical-specifications. It requires roads that limit vibrations on the vehicles. And it requires insurance companies that are aware of the transport risks and can offer competitive premiums. These are items that are slowly but steadily improving but the investment and expertise can only come if policy prescriptions propel initiatives forward.
Above all supply chain also requires extremely good connectivity that enables the flow of high-value goods and services in a seamless manner. This not only includes air connectivity but also intermodal connectivity and last-mile connectivity.
Average dwell times of 60 hours which are in some cases 10X the dwell times at airports such as Singapore and Dubai are simply not conducive. Alleviating this requires a focused effort towards a single outcome. Partial privatisation of railways (especially in the case of dry-ports) is also a step in the right direction. As a next step, the government will have to allow for private airstrips as well and in time private airports that can be built in conjunction with a manufacturing facility.
Finally, there is the issue of certification. Currently, the two must-have certifications are by the United States Federal Aviation Administration (FAA) and the European Aviation Safety Agency (EASA). Certification by these agencies signifies an aircraft that is widely accepted in the global aircraft markets. These consequently have impact on “liquidity of the aircraft” or simply the ability to buy and sell the aircraft.
The process is cumbersome and the aircraft and each sub-assembly must be separately approved. There is an extensive focus on design documents and compliance and given the challenges with programs such as the Boeing 737Max these have become even more stringent. And to be sure there are also geopolitical and pure-political issues at play with certification.
To alleviate the certification one simply has to build an aircraft that outperforms on all elements. And this has already been done by firms like Airbus with aircraft like the A330s or Bombardier with their C-series (now the A220). As the saying goes, “Be so good that they can’t ignore you.”
Swami Vivekananda famously quoted, “Arise, awake, and stop not until the goal is achieved.” As India finds itself poised to emerge as a world leader, dominance in aerospace will be critical. And slowly but surely we are moving towards the realm of possibility.
With the success of ISRO’s Chandrayaan-2 mission, the time is ripe for India to leverage the momentum and initiate a paradigm shift in its aircraft-manufacturing sector. It is a sector that can propel India forward by leaps and bounds and solidify its position as a world leader.
It is time for India to focus on building a commercial airliner.
Satyendra Pandey is the former head of strategy at a fast-growing airline. Previously, he was with the Centre for Aviation (CAPA) where he led the advisory and research teams. Satyendra has been involved in restructuring, scaling and turnarounds.