The Indian aviation market is clearly growing at a faster rate and recovering better than other countries after the pandemic eased. How does Boeing look at India at this point vis-a-vis other markets?
India is and always has been one of the most important countries in the world. When you look at the world today, particularly South Asia, India is the most exciting country to look at in terms of Boeing’s investment. It will soon become the largest footprint that Boeing has outside the United States. It has overtaken Australia and the investment that we’ve made here is certainly going to continue. The future for Boeing lies outside the United States. Last year, 40% of our revenue came from outside the US: 52% in commercial aircraft, 26% in defence. We’ve got 2,200 suppliers in 58 countries. 300 of them, as you know, are in India. We have 25,000 employees outside the US; 28,000 if you include our joint venture employees. Boeing now has 5,000 employees in India. Our 300 suppliers, in turn, employ about 13,000 Indians, about a quarter of those in micro and small and medium-sized enterprises.The first country that I have come to since I had the privilege to assume the responsibility of being president of Boeing International is India, and you can expect to see me here quite a bit over the next few years.
India has shaken off Covid woes faster than other commercial aviation markets…
Well, certainly in all the markets, growth has returned more quickly than I think any of the analysts expected. But, in India, especially, it’s growing very quickly. And the pentup demand during the period of the Covid-19 lockdowns and impact on the aviation sector has returned much more quickly in India. So, our ambition is to support the airlines, to support our customers, and to make sure that we have services that basically allow them to grow and rebound.
India hasn’t become a manufacturing hub yet as far as aviation and aerospace is concerned. How is Boeing helping?
Well, the model that we pursue, supports Prime Minister Modi’s ‘Make in India for India’. And the model that we pursue is obviously making strategic investments and working on co-development in the country. Of Boeing’s $1.5 billion of sourcing from India, over two-thirds are in manufacturing that we are already doing. So, the Tata Boeing Aerospace (TBAL), for example, and what we’re doing there with vertical fins on the 737 aircraft; the Apache (fighter helicopter) airframes are all examples of manufacturing in India for India and exporting from India, right? Rather than just simply building a manufacturing facility alone. We’re going to increasingly be looking at that model (manufacturing facility) at some time in the future if the business demands it, that’s something that we would look at, but not immediately.
What about plans of setting up a maintenance, repair and overhaul (MRO) facility and running it in India instead of handing it over to an Indian company?
Salil Gupte: So, MRO is different. MRO is separate from manufacturing. MRO is an aftermarket services business. Our goal in supporting Aatmanirbar Bharat for MRO is that there are already strong MROs in India. So, in the past, we’ve built an MRO in Nagpur and handed it to Air India. We have built a C-17 MRO, the world’s most complete C-17 MRO facility, and we’ll be handing it over to the Indian Air Force. And we are working with our MRO partners in India – Air Works, GMR – to do other work for customers here because those partners already exist. There’s not much need for an OEM to come and set up an MRO here. Would you want to comment on the supply chain issues that you and your airline customers are facing? Deliveries of the 787 Dreamliners to Vistara are lagging, setting back Vistara’s plans to start US flights.
Well, like so many companies in so many industries, we’ve got supply chain constraints brought about largely by the pandemic, and to some extent impacted by what’s happening in eastern Europe. We’re being very cautious in terms of the right production to make sure that they can be delivered. We’re looking at introducing a digital programme to improve the efficiency of our supply chains. We’re also very carefully monitoring our safety stock for supplies that are essential for the building of our aircraft.