Russians or Brazilians? The race to an FAL for jets in India heats up

Last week, as the Brics summit concluded under India’s chairmanship, one of the important business discussions which took place on the sidelines was the discussion on Atmanirbharta in civil aviation, backed by the Russians who organised their INNOPROM Trade fair on the sidelines of Brics.

United Aircraft Corporation, the Russian company now a merged entity of the multiple aircraft design bureaus from the Soviet era, signed a Letter of Intent with two companies in India for a total of 85 IL114-300 turboprop aircraft. This covers 50 planes with Pinnacle Air and 35 planes along with a training centre with Sleek Aviation.

The IL114-300 has been type certified in Russia in June this year, and a long certification process awaits in India if the Letter of Intent has to be converted to firm orders. Amidst the sanctions on Russian entities, there remain challenges on funding and importing these planes.

The forum reiterated the Memorandum of Understanding that UAC signed with HAL, early this year in Hyderabad on the sidelines of Wings India, for the joint production of SJ-100, the fully Russian regional jet. The SSJ-100, with its collaboration with Italians, was supposed to be a strong player in the regional aviation market as a European-Russian collaboration. This comes on the backdrop of the announcement by Embraer and Adani signing an MoU for the final assembly line of the E-175 in India. Despite record orders from India, neither Boeing nor Airbus has shown a willingness to start a Final Assembly Line (FAL) in India, though both global majors have increased their sourcing from India over the years and have developed multiple vendors.

India – the last major economy to not assemble a plane?

India has been looking for a civil FAL for a while. On the military front, there has been a long experience largely in the public sector and lately in the private sector with the likes of partnerships that see the C295 military transport aircraft assembly at Vadodara. The European Union has Airbus with facilities across multiple countries, while the United States has Boeing. Airbus opened its first Final Assembly Line in Tianjin, China, in 2008. Since then, Airbus has opened a second line in China. Russia has had a robust aviation ecosystem. 

Amongst the Brics nations, Brazil has the Embraer, while China has built its own civilian industry in the last few years with the Comac C909 and C919 airliners. 

India has tried building its own civilian airliner, in the form of Saras, which had its first flight in May 2004. The aircraft had a range of only 600 km with 19 passengers in its early configuration. 

Subsequently a second prototype was built which crashed in 2009, on the outskirts of Bengaluru, killing all the crew on board who were involved in testing the aircraft. There also remain few takers for Made in India Dornier, which is currently used only by state-owned Alliance Air, and in small numbers without a chance to scale up the production or use. 

This leaves India as the only major economy to not have its own airliner or an FAL, which it has been trying hard to achieve. 

Who’s first?

The Russians have signed an LOI with airlines as well as an MoU with HAL for joint manufacturing. On the other hand, Embraer from Brazil has signed an MoU for the final assembly line with the Adani group. In the case of United Aircraft Corporation, the aircraft is not yet inducted commercially and is yet to receive certification in India, while the Embraer E175 is already in operation in India with Star Air and with many other operators across the world.  

Traditionally, the number of regional aircraft operators has been few and far between in India. The lure of a final assembly line and possible government incentives on the line of the UDAN scheme can be very tempting for the airlines to sign up for planes. Aircraft production and setup is not a short-term affair and takes up resources and funds over multiple years. However, with focus from the top leadership, this could turn out to be a game changer for the country, where the demand has never been a problem but the cost side has always been a challenge.  

Who will be the first mover? Too early to tell. But there certainly won’t be a second mover due to the limited market size and the benefits of scaling up as a single player over competing in a market which does not have an FAL.

Ameya Joshi is an aviation analyst.