Economy

Boeing bullish on airlines’ prospects in India

Ravi Sharma Bangalore | Updated on March 12, 2018

Pratyush Kumar

‘Partnerships with pvt industry to build an ecosystem for aerospace in India is a priority for us’

Aerospace giant Boeing has in recent weeks been in the news because of the grounding in mid-January of its latest civil aircraft, the 787 Dreamliner. Air India has ordered 27 Dreamliners of which six have already arrived. In an interview with Business Line, Boeing India President Pratyush Kumar outlines the strategy for the country.

The grounding of Kingfisher Airlines’ - who flew your rival Airbus’ aircraft – means less Airbus aircraft flying in the Indian domestic sector. But Boeing still lags behind Airbus in aircraft sales in India. What are the fresh strategies Boeing is putting in place to take on Airbus?

We lead with our products, offering a value proposition that make sense to our customers and makes them competitive. If our customers are competitive they will gravitate towards. So fundamentally there is no shift in strategy. We make our customers competitive on their operation costs basis, be it fuel efficiency, maintainability of the aircraft, etc and all the things that come with it.

Not tweaking your strategy?

No. We plan to stay the course.

With Kingfisher Airlines flying into turbulence, funding and leasing agencies including the ILFC appear wary about funding domestic airlines in India…

You should ask people who are putting money into Jet Airways. They must see some health in the industry that’s why they are doing it.

Yes, but Jet Airways is an established airline that is up and running... What about new airlines, as an aircraft manufacturer don’t you see lack of funding as a key issue as you seek to sell aircraft?

See we are pretty bullish about the long term prospects of the airline industry in India. Look at the fundamentals. With 1.2 billion people, with vast geographic distances which cannot be covered efficiently because of very poor ground infrastructure both rail and road we think an eight to 10 per cent growth rate for the civil aviation market is very achievable. We remain optimistic and bullish about India. As for the financial security of new airlines, I cannot comment. Only thing I can say is that some very smart people have made investment decisions into Jet Airways which is a huge vote of confidence.

Compensation is being sought by India because of the delays in deliveries. Penalties...

Nobody from Air India has spoken to me about it. And I can’t comment on this.

On the military sales Boeing has recently won contracts to supply 10 C-17 Globemaster III strategic airlift aircraft, and the P8I maritime reconnaissance aircraft. Boeing has also been declared the lowest bidder in the 15 Heavy Lift (Chinooks) and 22 attack helicopters (the Apache). When do you see these being sewed up?

Negotiations are going on. It depends to a large extent on the Ministry of Defence

Boeing has been working with a number of Indian companies in the public sector most notably HAL. But increased offset obligations has necessitated collaborations with the private sector.

That frankly gets me really excited. We have a twin pronged strategy. First we want to bring the best of Boeing’s state-of-the-art products to India. At the same time, we want to bring the best of India to Boeing to make sure that the integration of products remains competitive. We are enthused by the private player’s willingness and interest to get involved in aerospace. We are very supportive of their efforts and want to work with them and develop them as long term reliable suppliers in a supply chain. We are keenly working with, maybe a dozen suppliers and some of their products have already been integrated on our equipment. Partnerships with private industry to build an ecosystem for aerospace in India is a priority for us. This will also allow us to discharge our offset obligations effectively.

Finally how do you see the prospect for the civil airline market in India?

Very bullish. We have projected that India's commercial aviation fleet will grow more than 4.5 times over the next 20 years. The Boeing 2012 Current Market Outlook India has forecast that the airline market in India will need 1,450 new airplanes worth $175 billion in next year 20 years.

ravi.sharma@thehindu.co.in

Published on February 10, 2013

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