MC Exclusive | Steadily growing components’ supply base from India: Boeing

(Representative image)

Boeing, the US-based aircraft manufacturing giant, plans to increase the sourcing of components from India for global manufacturing, a top executive with the company told Moneycontrol.

At present, Boeing sources around $1 billion worth of components from the country.

Notably, the aerospace major’s plans come amidst issues with global supply chains that have slowed down aircraft manufacturing and led to domestic airlines scouring for temporary fixes like wet leasing of aircraft to augment capacity.

According to Boeing India President Salil Gupte, the aircraft manufacturer sources components from over 300 suppliers that have become an integral part of the company’s global supply base.

“These Indian companies are manufacturing and exporting systems and components for some of Boeing’s most advanced products,” Gupte told Moneycontrol.

Apart from major components manufacturers, Boeing India has engaged several micro, small and medium enterprises (MSMEs) for supply of parts.

“We are steadily increasing sourcing from India for global manufacturing and supply chain and will continue to grow a globally competitive supplier base in India,” he said.

Gupte pointed out that the Covid-19 pandemic has disrupted global supply chains across industries, and companies are working through challenges. “We continue to experience real constraints in the supply chain and we are taking action to mitigate risk in a number of areas,” he said.

“To stabilise production and support our supply chain, we are increasing our on-site presence at suppliers, creating teams of experts to address industrywide shortages, utilising internal fabrication for surge capacity, and managing inventory safety stock levels and growing where needed,” he said.

He added that the aerospace major has risk-mitigation plans in place for critical components, saying, “As we prepare for future production rate increases, we will continue to prioritise operational stability across our value stream.”

On the trend of airlines increasingly wet-leasing aircraft especially Boeing 777s to add capacity, Gupte said, “Wet lease for 777s continues to be a cost-effective solution for airlines with an urgent need to expand their fleet for long-haul sectors, without incurring the cost associated with purchase and maintenance of the aircraft.”

“This has allowed airlines access to specialised aircraft and equipment, such as long-range or cargo aircraft, that they may not have in their own fleet,” he added.

The rush to boost fleet strength comes at a time when passenger traffic is booming.

The domestic aviation industry earlier this month registered a record high daily traffic of 4.13 lakh passengers compared to the pre-Covid high of around 4.07 lakh passengers per day.

As per industry insiders, pent-up demand, the onset of the marriage and holiday season along with the Centre’s initiatives like regional connectivity scheme UDAN and the opening of more airports across India are some of the reasons for the high passenger count.

“Airlines will need to ramp up their operations to meet this demand and may need to add additional flights and routes to accommodate travellers,” Gupte pointed out. “It is estimated that India will need over 2,200 new commercial planes valued at nearly $375 billion over the next 20 years.”

Gupte said that India is on track to be among the largest civil aviation markets in the world. India is currently the third-largest aviation market.