Making our own passenger airplane

When Laura Tyson, economist and Bill Clinton’s adviser, wrote that a dollar worth of shoes is not the same as a dollar worth of computers, she meant the effect technology and manufacturing will have on jobs, economic multipliers, and trade. India’s space vehicle and combat aircraft development have shown great technology spinoffs and have been economic multipliers. But space vehicles or combat aircraft are not civil aircraft. The first cousin to a civil aircraft is a military transport aircraft as these, too, are certified to civil aircraft regulations. But the commonality ends there. Civil aircraft development is to be seen in terms of hard, cold numbers of ownership, fuel and maintenance costs. The internet is strewn with stories of failures of manufacturers and airlines who lost sight of this.

Global 20-year forecasts show that the fleet sizes for single-aisle aircraft (A320 and B737) is around 32,000, widebodies around 8,000, and of regional aircraft, about 5,000. Over 75% of the market is held by single-aisle aircraft because they represent the middle of the market, have scale and are versatile to be deployed on most networks that see cyclic demand. These aircraft have eaten into the widebody market, especially in Covid times. Regional aircraft have always faced a challenge, buffeted by competition between surface transport and single-aisle aircraft.

The Indian market represents a sweet spot. The present reduction in demand from Covid is just a blip. New route networks into Tier-I cities by Indigo and SpiceJet have been stable and price elastic. The government’s ‘Udan’ has done what the Essential Air Services in the US did not. It will aid the growth of India’s smaller cities and create a more even economic-geography. Even in India, single-aisle aircraft play a predominant role (over 75% of the fleet), while regional aircraft are route development aircraft, till the single-aisle aircraft take over.

India has had its experiments with civil aircraft development and manufacturing. The HS-748 (Avro) was part of Indian Airlines, till the airline turned into an all-jet fleet in the 1980s. Vayudoot used the Dornier-228 as its mainstay, till the airline collapsed. Both these aircraft are now military transports, still used extensively by the IAF and Indian Navy, and one needs to give them credit for that. HAL, NAL and private companies have had their tryst with civil aircraft development, but the challenges are— among others— international certification and economies of scale.

Frequently, Brazil and China are cited as case studies. The Brazilian company Embraer was born during the Cold War, when Brazil was the non-Communist bulwark for the US, in the times of Castro of Cuba and Allende of Chile. It got help and a bit of the US market for its small aircraft, and there was no looking back. Equally, China was cultivated during Richard Nixon’s time and Deng Xiaoping used China’s market potential, offsets and low labour costs to encourage civil-aircraft parts manufacturing for global companies. The country now manufactures a regional jet and a single-aisle aircraft which is close to Chinese certification and has an assembly line for the A320.

We are at the cusp of a dramatic technology revolution in civil aircraft. Electric propulsion, or even hydrogen, could be a reality sooner than we think. In India, the government plans a hydrogen mission and is focused on electric vehicles. The unmanned air-taxi revolution, with dedicated airspace and certification to carry passengers, will impact regional air mobility. So, smaller conventional aircraft will see competition from a new source. Much of this will come from startups, with unmatched energy to innovate, and it is wise to give them the space. But, even as things change, some challenges remain the same: international safety certification, scale and operating economics.

India, with its post-Covid geopolitical status and its market, stands a chance like never before, if its policymakers take pragmatic decisions involving the size of aircraft they would support, the technologies that can be developed or co-developed, and the countries to align with. This could further integrate India into the global supply chain and give China a run for its money.

Lastly, experience has shown that it is not easy to achieve viability or financial closure on civil aircraft projects. An imaginative combination of financial instruments that securitises and values spinoffs, economic multipliers, trade and offsets, private sector and international participation is required. Technology pragmatism and cold operating economics are what one needs to go by. More than anything else, it is the strategic plan to harness the energy of the startups, the wisdom of the private sector in market understanding and delivery, and the utilisation of public technology infrastructure that will be vital.

Policymakers should consider the unprecedented opportunity to push for new technologies that will have spinoffs across the board while recognising the coming revolution in regional air mobility and partnering to manufacture a right-sized aircraft.

(The writer is a former Programme Director (Civil Aircraft) at NAL and has served on various committees on aviation policy and the CII National Committee on Civil Aviation)