Airbus and Boeing are under increasing pressure to build jetliner factories in India after the nation's civil aviation minister told Reuters that the "time has come" to meet its surging demand with aircraft built there.
As India's rapidly expanding aerospace industry reaches a "inflection point," highlighted by plans to locally assemble Airbus C295 military transport planes, Jyotiraditya Scindia said the conditions are favorable for a "leap of faith" by both jetmakers.
Scindia responded, "Absolutely, and with a capital A. And the reason why I said capital A is because Airbus has already made that huge landmark step: the C295," when asked if Airbus and Boeing should now consider setting up jetliner assembly in India.
Both Airbus and Boeing have emphasized the size and sophistication of current investments in India while downplaying the importance of final passenger jet assembly.
In order to help Prime Minister Narendra Modi's "Make In India" initiative to grow the world's fifth-largest economy, an Airbus-Tata consortium plans to assemble 40 C295 airplanes in Gujarat, his home state.
Airbus and Boeing received record orders from Tata-controlled Air India last month totalling 470 aircraft, and reports claim IndiGo, India's largest airline, is in talks to purchase an additional 500 aircraft.
"The market is there, the volume is there, the engineering talent is there. And then you take that leap of faith. So the time has come now," Scindia said in an interview, adding such decisions would not necessarily be tied to specific jet orders.
"Now is the time for these companies to look at planting their feet on the ground in India," he said.
India has been quietly pushing for jet assembly for a number of years, but over the past year, pressure has increased behind the scenes, according to two people with knowledge of the situation.
The drive comes as the two major global airlines struggle to balance the need for capacity to fulfill increasing demand with pressure on global supply networks and geopolitical unrest.
Airbus operates four sets of competitive A320 lines in Europe, the US, and China, while Boeing maintains the industry standard 737 production in the Seattle area.
While highlighting current investments in engineering, supply chains, and maintenance, both seem to have rejected India's calls for civil final assembly lines (FAL).
While Airbus claimed to spend $700 million, Boeing claimed to spend $1 billion annually on parts and services from India.
Defense projects are the only ones that can use local assembly since the expense of addressing national security concerns can be included in.
"There's a desire in every country to have as much manufacturing as possible ... and final assembly is a desire that you see all around the world," Salil Gupte, president of Boeing India, said.
"The volumes that you would require for final assembly on the commercial part of the business are just far, far greater," he said.
The business case will ultimately determine the choice, and Boeing is constantly searching for ways to expand its operations in India, he continued.
Both aircraft manufacturers have engineering facilities and hundreds of staff in India, and Boeing this month announced the opening of a facility in Hyderabad to convert 737 passenger planes into dedicated freighters.
"Even without the C295 FAL, the Airbus industrial footprint in India already generates more foreign exchange value and jobs for the country than any modern assembly activity would," said Remi Maillard, president of Airbus India & South Asia, by email.
Nonetheless, Scindia claimed that such an ecosystem would offer the confidence to build a plant in the future because "everything is working for it."
Despite only making up 5% to 7% of a plane's value, according to aerospace analysts, assembly is frequently viewed as a political success.
"The reason is it puts you on the map; it shows that you are the up-and-coming economy in Asia and the world," said Jerrold Lundquist, managing director of The Lundquist Group.
In exchange for a predetermined number of aircraft for regional airlines, Airbus opened an A320 line in northern China in 2008, when its market share in China was only approximately 30%.
The New Delhi government has no official sway over the ordering by its budget-conscious private-sector airlines, observers claim, even though Chinese authorities must approve orders for airplanes.
Despite McDonnell Douglas having built a small number of aircraft in China prior to being acquired by Boeing in 1997, Boeing has never established a commercial assembly line outside of the United States. A 737 cabin-completion facility was inaugurated in Zhoushan, China, in 2018.
(Source:www.reuters.com)
As India's rapidly expanding aerospace industry reaches a "inflection point," highlighted by plans to locally assemble Airbus C295 military transport planes, Jyotiraditya Scindia said the conditions are favorable for a "leap of faith" by both jetmakers.
Scindia responded, "Absolutely, and with a capital A. And the reason why I said capital A is because Airbus has already made that huge landmark step: the C295," when asked if Airbus and Boeing should now consider setting up jetliner assembly in India.
Both Airbus and Boeing have emphasized the size and sophistication of current investments in India while downplaying the importance of final passenger jet assembly.
In order to help Prime Minister Narendra Modi's "Make In India" initiative to grow the world's fifth-largest economy, an Airbus-Tata consortium plans to assemble 40 C295 airplanes in Gujarat, his home state.
Airbus and Boeing received record orders from Tata-controlled Air India last month totalling 470 aircraft, and reports claim IndiGo, India's largest airline, is in talks to purchase an additional 500 aircraft.
"The market is there, the volume is there, the engineering talent is there. And then you take that leap of faith. So the time has come now," Scindia said in an interview, adding such decisions would not necessarily be tied to specific jet orders.
"Now is the time for these companies to look at planting their feet on the ground in India," he said.
India has been quietly pushing for jet assembly for a number of years, but over the past year, pressure has increased behind the scenes, according to two people with knowledge of the situation.
The drive comes as the two major global airlines struggle to balance the need for capacity to fulfill increasing demand with pressure on global supply networks and geopolitical unrest.
Airbus operates four sets of competitive A320 lines in Europe, the US, and China, while Boeing maintains the industry standard 737 production in the Seattle area.
While highlighting current investments in engineering, supply chains, and maintenance, both seem to have rejected India's calls for civil final assembly lines (FAL).
While Airbus claimed to spend $700 million, Boeing claimed to spend $1 billion annually on parts and services from India.
Defense projects are the only ones that can use local assembly since the expense of addressing national security concerns can be included in.
"There's a desire in every country to have as much manufacturing as possible ... and final assembly is a desire that you see all around the world," Salil Gupte, president of Boeing India, said.
"The volumes that you would require for final assembly on the commercial part of the business are just far, far greater," he said.
The business case will ultimately determine the choice, and Boeing is constantly searching for ways to expand its operations in India, he continued.
Both aircraft manufacturers have engineering facilities and hundreds of staff in India, and Boeing this month announced the opening of a facility in Hyderabad to convert 737 passenger planes into dedicated freighters.
"Even without the C295 FAL, the Airbus industrial footprint in India already generates more foreign exchange value and jobs for the country than any modern assembly activity would," said Remi Maillard, president of Airbus India & South Asia, by email.
Nonetheless, Scindia claimed that such an ecosystem would offer the confidence to build a plant in the future because "everything is working for it."
Despite only making up 5% to 7% of a plane's value, according to aerospace analysts, assembly is frequently viewed as a political success.
"The reason is it puts you on the map; it shows that you are the up-and-coming economy in Asia and the world," said Jerrold Lundquist, managing director of The Lundquist Group.
In exchange for a predetermined number of aircraft for regional airlines, Airbus opened an A320 line in northern China in 2008, when its market share in China was only approximately 30%.
The New Delhi government has no official sway over the ordering by its budget-conscious private-sector airlines, observers claim, even though Chinese authorities must approve orders for airplanes.
Despite McDonnell Douglas having built a small number of aircraft in China prior to being acquired by Boeing in 1997, Boeing has never established a commercial assembly line outside of the United States. A 737 cabin-completion facility was inaugurated in Zhoushan, China, in 2018.
(Source:www.reuters.com)
