Civil Aviation Secretary Rajiv Bansal on Tuesday said that despite being a large country, India does not have the capability to manufacture commercial aircraft and this has been one of its “biggest failures”.
Last month, Air India placed an order for 470 aircraft: 250 with European plane maker Airbus and 220 with American giant Boeing. While this is the world’s largest ever single-tranche aircraft purchase, all these planes would be built in Europe and America.
On the other hand, China’s state-owned Commercial Aviation Corp of China (COMAC) has delivered the first domestically-manufactured commercial aircraft, C919, late last year. The company claimed that it has received 1,200 orders for the jet.
“We, despite being a large country, do not have the capability to manufacture our own aircraft, and this is one of our largest failures. The minister (Civil Aviation Minister Jyotiraditya Scindia) alluded to this yesterday,” Bansal said during the CAPA India Aviation Summit 2023.
He called India’s inability to manufacture commercial aircraft a “huge pain point.”
During the summit, Bansal also said that the government is expecting to complete the disinvestment of India’s largest aircraft maintenance, repair and operations (MRO) company AI Engineering Services Limited (AIESL) in a couple of months and it will invite expression of interest “very soon”.
“We are in the process of disinvesting AIESL, which is the largest MRO in India. It is a good MRO. I had the fortune of heading it. It is no longer in the red. It has a healthy top line and bottom line too. I think once this disinvestment goes through, hopefully, in a couple of months from now, this would augur well for the Indian aviation industry,” Bansal said.
The civil aviation secretary said the disinvestment process of AIESL is currently in “advanced stages”. The government has already conducted road shows to engage with potential investors, he added.
The group of secretaries has approved AIESL’s disinvestment, and the matter is now before the Air India Specific Alternative Mechanism (which is a ministerial panel), Bansal said.
The government had sold Air India to the Tata Group in October 2021.
However, Air India’s three subsidiaries — AIESL, AI Airport Services Limited (AIASL) and regional airline Alliance Air — were not part of the deal. The government has now kick-started the process to sell these three entities.
During the summit, Bansal highlighted three major challenges that the Indian aviation sector is facing. Firstly, the absence of big MRO facility in India, which forces airlines to send their planes, engines, and parts overseas, incurring both time and cost.
Secondly, the need to develop world-class infrastructure, in which India has been behind the curve. And finally, the shortage of planes and engines, despite the high demand, poses a significant challenge for the industry.
Currently, about 22 Go First planes and 34 IndiGo planes are grounded due to delays in the supply of engines by Pratt and Whitney.
“We have taken up the issue with engine makers at the highest level. Our minister has spoken with them. We have requested them to forward supplies to us as a large number of our aircraft are on the ground and that is impeding the growth of the sector. They are looking at it and will respond by this week,” Bansal told reporters.
And it is not just the engine makers.
Boeing and Airbus too are finding it difficult to maintain their aircraft delivery schedule due to supply constraints, etc.
Bansal said, “We have been telling the major OEMs (original equipment manufacturers who make aircraft, engines, etc.) to support our growth. Today, in our country, there is demand, but there is no supply. Our carriers are getting demand from the consumers. The fares are very high. Aircraft manufacturers and the engine manufacturers are not able to supply the aircraft and engines.”
On the impact of Air India’s privatisation, he said India does not have an airline with a size commensurate with its size and requirement.
“Had it (Air India) remained with the government, there was no way that the airline would have been able to place an order of the magnitude of 470 aircraft,” he mentioned.
“The privatization also provided a level-playing field for other carriers. Otherwise, it was a government carrier where the sovereign (the government) was constantly pumping money. And hence, it was not a level-playing field for other players,” he added.
He said two cities — Delhi and Mumbai — are going to get their second airports within the next year. Moreover, airports in Delhi, Bengaluru, Hyderabad, Chennai, and Kolkata are also expanding as demand is rising.
“Together, at the six major airports, we have a capacity of about 320 million… I think we should be looking at a 500 million capacity at these six airports as we go forward,” Bansal said.
He also said that the consultation paper for increasing charges for the non-major airports has been issued.
“The consultation paper is out… We hope to finalize it in the coming weeks. All the non-major airports are running into losses, and we should keep a reasonable return on investment for them,” he added.