India has set the ball rolling on its plans to manufacture a commuter aircraft with a range of 600–700 km through the formation of a dedicated company (a special purpose vehicle), sources told businessline.
According to sources, the Ministry of Civil Aviation has already sought approval from the Ministry of Finance to move forward with the formation of this new entity. The proposal has been presented to the Committee on Establishment Expenditure (CEE).
Notably, the SPV has been proposed to be created under Section 8 of the Companies Act.
“The SPV is meant to bring together various stakeholders from both the public and private sectors including experts, and representatives of companies like technology providers, air framers amongst others to develop India’s first commuter aircraft,” sources told businessline.
“The SPV will be responsible to approve the design of the aircraft. It will look at the financial and demand aspects of the aircraft. Besides, it will facilitate the transfer of any required technology.”
In the later stage of the programme, sources pointed out that a single company or a joint venture (JV) will manufacture the actual aircraft, under the guidance of the SPV.
“The SPV will also provide guidance on how to promote aircraft components manufacturing in the country to support this programme.”
Besides, the initiative is part of the Bhartiya Vayuyan Adhiniyam, 2024, which was passed by Parliament earlier this month. The legislation includes provisions for regulating the design and manufacturing of aircraft.
As per sources, the SPV will be established without any requirement for initial seed funding. Instead, it will be supported through budgetary grants.
“However, the release of funds will be contingent upon the SPV achieving clearly defined milestones, ensuring that the project progresses efficiently and remains on schedule,” sources said.
“The SPV will have a tenure of five years and a clear mandate to spearhead the development of a commuter aircraft.”
Furthermore, sources cited that the country aims to develop a commuter aircraft with a range of 600–700 km, fostering the growth of an aviation manufacturing ecosystem and supporting start-up airlines reliant on turboprop or small jet aircraft.
The short-haul air travel segment has seen significant growth recently, driven by the development of new airports and the emergence of regional airlines. The government’s Regional Connectivity Scheme (RCS-UDAN) has played a pivotal role in this expansion.
“The project will bring significant benefits to the country. It will enhance the manufacturing capacity for aircraft parts and lead to the development of an aircraft tailored to meet India’s unique requirements.”
“An indigenously developed aircraft will reduce travel costs and create job opportunities in the aviation manufacturing sector.”
Additionally, it has been proposed that the SPV, once formed, makes the strategic decision to either progress with the RTA-90 (regional transport aircraft) project or opt for a ‘clean sheet design’ format.
The RTA-90 project is a regional airliner with a capacity to seat 90 passengers, being designed by the National Aerospace Laboratories (NAL). The aircraft will be manufactured by Hindustan Aeronautics Limited (HAL), whereas a clean sheet design would involve the development of a completely new aircraft.