With Airbus and Boeing struggling to deliver aircraft on time, could this present an opportunity for a new player, including one hailing from India? India has invited companies to open manufacturing facilities in the country via the 'Make in India' initiative

However, the window of opportunity might be too narrow since both companies should recover in a few years' time, which is too short for any new entrant to develop a commercial aircraft program, reported SimpleFlying.com .

With both Airbus and Boeing struggling to deliver aircraft on time, with the duo dealing with external supply chain issues while the latter is also dealing with internal problems, there have been rumblings about China joining the duopoly, opening up the lucrative single-aisle jet market to a triopoly.

At the same time, similarly to China, India has been looking to advance its manufacturing industry. While the former has begun moving to the services industry, the latter, which has outgrown China in terms of its population in April, per the United Nations (UN), was looking to bring manufacturers to build factories inside the country, providing much-needed jobs to a fast-growing population.

While setting up a whole supply chain is no easy feat, and that is putting it lightly, India has been actively pursuing a policy of inviting more global companies to build factories inside the country. The policy resulted in the ‘Make in India’ initiative, which Narendra Modi, the Prime Minister of India, launched in September 2014.

According to a document by the Indian Ministry of External Affairs (MEA), the initiative was launched as part of India’s focus on manufacturing goods globally. The MEA highlighted that since the launch of ‘Make in India,’ the government has initiated reforms to create an environment that enables companies to launch businesses in the country.

“The Make in India initiative aims to make India an integral part of the global supply chain. It is about making Indian companies excel in a globalized workspace. India has vigorously opened up its economy – Defence, Railways, Construction, Insurance, Pension Funds, Medical Devices have all been rapidly opened up for Foreign Direct Investment.”

Meanwhile, the World Bank’s data showed that India ranked fifth in terms of global manufacturing output measured by value added to the general domestic product (GDP), with the country’s most recent value being $456 billion in 2022. It was still far behind China and the United States, whose added value was $4.9 trillion in 2022 and $2.4 trillion in 2021, respectively. Still, it represents a significant rise compared to 2014, when India’s added value from manufacturing was measured at $307.21 billion.

Demand For Aircraft

More manufacturing sites opening up in a location has one clear benefit to the local population: jobs. With job growth comes earnings growth, and with more earnings, people can spend their hard-earned money on non-essential things such as travel. As a result, India is predicted to have the largest aviation market in the world.

In the International Air Transport Association’s (IATA) Global Outlook for Air Transport report from December 2023, the association highlighted that the global air transport market should have a compound annual growth rate (CAGR) of 3.4% between 2019 and 2040. However, IATA highlighted that Asia-Pacific should see the fastest growth, with an annual increase of passengers of 4.5% during the same period. The association also featured India, stating that the country was expected to significantly contribute to growth, with a forecasted annual passenger growth rate of 6% between 2019 and 2040.

To carry those passengers, airlines will have to have aircraft. According to Airbus’ latest Global Market Forecast (GMF), the global airline fleet will grow from 22,880 aircraft in 2020 to 46,560 by 2024, with 40,850 of those being new deliveries. Boeing’s latest Commercial Market Outlook (CMO) predicted that the global airline fleet would measure 48,575 aircraft by 2042, including 42,595 newly delivered aircraft between 2022 and 2042.

Assembling In India

Thus, manufacturers will have to expand their production capabilities to meet airline demand. Both members of the duopoly have already entered China, with Airbus opening a final assembly line (FAL) and a widebody completion and delivery center (C&DC) in Tianjin, China. The European plane maker has also begun building a second assembly line at the site, which should come online in late 2025.

Meanwhile, Boeing has a 737 Completion & Delivery Center in Zhoushan, China. However, the two manufacturers have had different fortunes with the country’s markets as Boeing has suffered from the fallout of the US-China Trade War that was initiated by Donald Trump, the now-former President of the US.

Jyotiraditya Scindia, the Minister of Civil Aviation of India, told Reuters in March 2023 that the timing was right for Airbus and Boeing to build assembly lines in the country. According to Scindia, the conditions were great for either of the manufacturers to trust the local aerospace industry and begin building aircraft in one of the fastest-growing economies globally.

“The market is there, the volume is there, the engineering talent is there. And then you take that leap of faith. So the time has come now.”-

The minister pointed out that Airbus already has an assembly line in India. Built in partnership with Tata Advanced Systems Limited (TASL), whose parent company also owns Air India, the FAL should deliver the first domestically manufactured Airbus C295 in 2026, according to the plane maker’s statement in September 2023. Airbus stated at the time that the assembly line should be operational by November 2024, adding that the Indian joint venture should deliver 40 out of 56 C295 that the Indian Air Force (IAF) had ordered to the service branch by August 2031.

Breaking Up The Duopoly

According to the All India Association of Industries (AIAI), an association established in 1956, India’s competitive advantage against other countries is its low production costs, adding that the presence of resources and supporting regulations is a considerable facilitator of growth opportunities.

Speaking with Reuters during the Wings of India event in January 2024, Remi Maillard, the president of Airbus India and South Asia, stated that the company has planned to purchase parts worth up to $1.5 billion in the coming years. In turn, Boeing opened its Boeing India Engineering & Technology Centre (BIETC) in Bangalore, India, in January 2024.

According to Modi’s statement at the time, Stephanie Pope, who has now become the chief executive officer (CEO) of Boeing Commercial Airplanes (BCA), praised the government’s efforts in aerospace, adding that the company had plans to create an ecosystem that would propel India to the forefront of the aerospace industry.

Modi added that he was hopeful that India would one day design an aircraft of the future at BIETC. While that might be wishful thinking, it has been hard to deny that India lacks ambition. At the same time, does India need to break up the duopoly?

After all, creating a new supply chain from scratch, no matter one’s expertise and experience, is a very complex process. The Commercial Aircraft Corporation of China (COMAC) managed to deliver the C919 some seven years later after it was initially scheduled to enter commercial service in 2016.

On May 28, China Eastern Airlines took delivery of its sixth COMAC C919 aircraft, still being the only airline in the world to operate the type.

Meanwhile, Japan-based Mitsubishi, a conglomerate composed of eight groups of companies, could not manage to deliver a commercial aircraft despite billions of investments into the Regional Jet, later renamed the SpaceJet program. In total, the Japanese congolomerate sunk in more than ¥1 trillion ($6.3 billion) into the development of the regional aircraft when it ended the program, according to The Japan Times.

Furthermore, are Airbus and Boeing going to struggle with their supply chains for decades to come, which could provide an opportunity for countries such as India to launch their competitor to the A320neo or 737 MAX aircraft families? In the short-term future, probably not.

However, with the advancements of new technologies, including the focus on more sustainable propulsion solutions, it could mark an opportunity for newly emerging technological clusters to provide support to develop technologies and be an important part of a larger program that would be headed by a more experienced entity.

At the same time, national pride should never be discounted. Considering some of the rhetoric that authoritarian or authoritarian-leaning politicians have expressed over the years, including the need to focus on building stuff domestically, it would be hard to completely rule out a possibility for India to take a swing at designing and building its own commercial aircraft.