TÊTE-À-TÊTE WITH BOEING INDIA

On the sidelines of the announcement, Jayant Baranwal, Editor-In-Chief, SP’s AirBuz had a quick chat with Boeing India President, Salil Gupte. Excerpts from the conversation

Jayant Baranwal (Baranwal): What kind of split is there between Boeing and GMR on this project?

Salil Gupte (Gupte): Well, they are to partner with us contractually. So the way it works is, for everything we have arrived at an economic agreement per conversion that has to be done.

Baranwal: Even though the capacity number isn’t announced yet, is it going to be a used aircraft for the freighter conversion line?

Gupte: So the way it works is you have a midlife asset so it is a used aircraft, always, for freighter conversion. It’s usually about halfway through its usable life traditionally, and the aircraft can be owned by anyone. Sometimes they are even owned by leasing companies; sometimes by airlines, sometimes it’s cargo companies themselves. So it’s all of the above really in terms of potential customer types.

Baranwal: Can you elaborate industrial capital please? You talked about India’s strong industrial capital, do you mean India is rich in terms of supply chain capability? Gupte: Yes, so industrial capital is your supply base and that is one of the things that has evolved so greatly over the last decade. It is in manufacturing where we have gone from simple assemblies, simple electrical work to more complex electrical work, more complex components to large scale air structures like Mark Allen mentioned the Apache fuselage, the 737 to next generation manufacturing technologies like full scale determining assembly to working with complex composites, like the 787 floor beams. And then of course, there’s the MRO capability that Ashok and others in the industry have come up with over the course of over a decade, but has really started to accelerate since the government made its decision to rationalise taxation on MRO a couple of years ago and that will allow India to grow in that space.

Baranwal: But we are still far from the overall integration of the commercial aircraft. Can India produce or deliver the Boeing and Airbus in the country itself? Gupte: It’s not clear to me whether that is how you should judge India’s progress because the final assembly of an aircraft, whether it’s a defence or commercial, matters, but it’s less than 10 per cent of the value of the airplane. So it’s not a significant number. So to me, that’s not how you judge the progress of the supply chain. How you judge the progress of the supply chain is the maturity of the complexity of what it can do. And in that India has been accelerating at a very impressive rate over the last decade, both in manufacturing and in services.

Baranwal: Some companies around the world are coming up with unmanned systems as well for the cargo solution, is Boeing also looking at that?

Gupte: This is a traditional technology in terms of leveraging used aircraft like the 737 NG, 737-800 aircraft and we’re taking that into the freighter conversion realm and we’ve been doing so. We had our 100th delivery of this aircraft last September. So it’s a tried, proven platform and it’s for a certain amount of cargo space. The unmanned solutions that you are referring to are very small, they are last mile delivery and there’s a number of companies around the world that are evaluating large scale drones for leveraging that delivery. Certainly, Boeing has its own autonomous technology but right now we are focusing on passengers there. Certainly, there are opportunities beyond that in the future but that’s a completely different class.