Supply Chain Woes Impacting Aerospace Industry Dynamics

The aerospace industry, a critical driver of global transportation and technological advancement, is grappling with persistent challenges in its supply chains. Safran CEO Olivier Andries recently delivered a sobering assessment, stating that the difficulties plaguing the supply chain are far from resolved and are likely to persist throughout 2024. This revelation comes as a stark reminder of the ongoing turbulence in an industry that is essential for global connectivity.

Supply Chain Struggles Extend into 2024

Olivier Andries, CEO of Safran, a leading player in the aerospace industry, emphasized that the aerospace supply chain woes are not abating. These issues encompass a range of factors, each contributing to the industry's ongoing struggles.

Materials Shortages: Titanium and Steel

One of the most acute challenges facing aerospace supply chains is the shortage of essential materials like titanium and steel. These metals are vital for the construction of aircraft components, and their scarcity has led to price inflation and production delays, impacting manufacturers' ability to meet demand.

Castings and Forgings

In addition to material shortages, the aerospace industry is grappling with challenges related to castings and forgings. These processes are crucial in the manufacturing of aerospace components, and disruptions in these areas further compound the supply chain woes.

Chip Shortages Easing, Recruitment Remains a Hurdle

While there is some relief in the form of easing worldwide shortages of computer chips, recruitment difficulties persist. The pandemic led to a wave of early retirements within the industry, leaving a void in skilled labor that remains challenging to fill. This talent gap hinders the industry's ability to scale up production to meet surging demand.

Impact on Airliner Production

The supply chain shortages have a direct impact on the production of airliners. Safran's CEO pointed out that these challenges have complicated efforts to increase production rates. In particular, discussions regarding engine supplies for 2025 are still ongoing, highlighting the uncertainty that looms over the industry's future output.

CFM's Role in Aerospace Supply Chain

CFM, a joint venture between Safran and General Electric, holds a pivotal role in the aerospace industry. They are the sole engine supplier for the Boeing 737 and have a 60% share of the backlog for the Airbus A320.

Airlines can choose between engines from CFM or Pratt & Whitney for the A320. CFM's alignment with manufacturers on production plans through the end of 2024 provides some stability, but the unresolved discussions for 2025 further emphasize the lingering uncertainty in the sector.

Conclusion

The aerospace industry's supply chain challenges, as outlined by Safran CEO Olivier Andries, paint a complex picture for the future. The shortage of materials, ongoing talent recruitment hurdles, and complications in production planning all contribute to an environment of uncertainty.

As the industry seeks to recover from the pandemic's impact and meet growing demand for air travel, addressing these supply chain issues will be paramount. The aerospace sector, vital for global connectivity, must navigate these challenges to ensure it remains a cornerstone of modern transportation and technological advancement.

With Inputs from Reuters

In a significant development in the aviation industry, Brunei-based airline GallopAir has announced its intention to acquire 30 aircraft from the Chinese planemaker Commercial Aircraft Corporation of China (COMAC). This historic deal, worth a total of $2 billion, was unveiled at a regional trade convention in China and represents a major step for both GallopAir and COMAC.

The purchase includes a mix of COMAC's ARJ21 aircraft and the state-backed firm's narrow-body C919 jet, marking a significant milestone in China's efforts to establish itself as a formidable player in the global aviation market.

GallopAir's Ambitious Plans

GallopAir, a relatively unknown player in the aviation industry, made headlines with its announcement of a letter of intent to acquire a diverse fleet of aircraft from COMAC. The deal includes 15 orders for COMAC's ARJ21, which encompasses freighter and business jet variants, as well as 15 of the C919 jets. This move by GallopAir reflects its ambitious plans to expand its presence and offer flight services within the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area.

COMAC's Growing Influence

The Chinese aircraft manufacturer COMAC has been striving to challenge the dominance of established giants like Airbus and Boeing. The C919, designed by COMAC to compete with Airbus SE's A320neo and Boeing Co.'s 737 MAX single-aisle jet families, completed its maiden commercial flight in May. This marked a significant milestone for COMAC and showcased China's aspirations to become a major player in the global aviation industry.

Key Deal Details

The announcement of this deal came through China-based Shaanxi Tianju Investment Group, an investor in GallopAir, in a WeChat post. The agreement stipulates that the aircraft from COMAC will undergo due diligence and certification processes by Brunei's Department of Civil Aviation before they can be delivered to GallopAir. The airline has projected that flight operations will commence in the third quarter of 2024.

GallopAir's Place in Aviation History

Once this deal is finalized and the aircraft are in service, GallopAir will become only the second international operator of Chinese-made aircraft, following Indonesian low-cost carrier TransNusa. TransNusa currently operates a small fleet of ARJ21 aircraft, which serves as a predecessor to the C919. This achievement will undoubtedly position GallopAir as a trailblazer in the global aviation industry.

Conclusion

The announcement of GallopAir's intent to purchase 30 aircraft from COMAC represents a significant step forward for both the airline and the Chinese aircraft manufacturer. It underscores China's ambitions to establish itself as a formidable player in the global aviation market and highlights the growing influence of COMAC in the industry.

As GallopAir prepares to make history as the second international operator of Chinese-made aircraft, the aviation world eagerly awaits the successful completion of this landmark deal and the subsequent entry of these aircraft into service in the East ASEAN Growth Area.

With Inputs from Reuters

In a year marked by numerous challenges for the aviation industry, Akasa Air, India's youngest and greenest airline, has been making headlines for its remarkable growth and ambitious plans. Since April of this year, the airline has seen a significant boost in its pilot roster, defying expectations and setting the stage for an exciting future.

Steady Growth in Pilot Roster

One of the most noteworthy achievements for Akasa Air in 2023 is the substantial increase in its pilot roster. The airline has expanded its pilot strength by a staggering 30% since April, bringing the total count to an impressive 450. This development is a testament to Akasa Air's ability to attract and retain top talent in the competitive aviation industry.

Despite the airline facing legal issues with some pilots who resigned without serving the stipulated notice period, Vinay Dube, the CEO of Akasa Air, remains resolute in his commitment to further bolster the pilot workforce. The airline has set a bold target to double its pilot strength to 900 by the fiscal year 2024-25.

Refuting Claims of Mass Exodus

Vinay Dube has been quick to dispel rumors of a mass exodus of pilots from Akasa Air. He asserts that the airline is experiencing more pilots joining than departing, a reassuring sign of the company's stability and appeal as an employer. Dube also highlighted that Akasa Air boasts one of the lowest attrition rates in the industry.

Moreover, the airline has a substantial number of pilots in various stages of training, enough to operate 30 aircraft, even though the current fleet consists of 20 planes. This robust pipeline of talent positions Akasa Air for continued growth and expansion.

Strategic Backing and Expansion Plans

Akasa Air, backed by the family of the late renowned investor Rakesh Jhunjhunwala, has ambitious plans on the horizon. The airline aims to expand its fleet to 28 aircraft by March 2024 and plans to add 10-12 planes annually in the coming years. This aggressive expansion strategy signals Akasa Air's determination to establish itself as a major player in the Indian aviation market.

Challenges on the Horizon

Despite its impressive growth, Akasa Air has not been immune to the challenges that have plagued the airline industry in recent times. In August, the airline faced the cancellation of more than 632 flights, causing disruptions for passengers and affecting the company's operations. Additionally, the airline has been grappling with the ongoing cancellation of 24 flights daily in September.

However, CEO Vinay Dube remains steadfast in his confidence that these challenges will not deter Akasa Air from pursuing its expansion plans. This includes the eagerly anticipated launch of international flights, scheduled for December, which is expected to open up new horizons for the airline and further solidify its position in the Indian aviation landscape.

Conclusion

Akasa Air's remarkable growth in pilot strength and its ambitious expansion plans showcase the airline's resilience and determination to succeed in a challenging industry. With strategic backing and a commitment to providing a green and sustainable flying experience, Akasa Air is poised to continue soaring to new heights, leaving an indelible mark on the Indian aviation sector.

With Inputs from Economic Times

The Directorate General of Civil Aviation (DGCA) has taken decisive action in response to safety concerns within Air India, suspending the Chief of Flight Safety, Captain Rajeev Gupta, for one month. This move comes after a comprehensive surveillance of the airline was conducted on July 25 and 26th 2023, by the DGCA, which revealed serious deficiencies in various critical areas.

DGCA's surveillance carried out over two days, scrutinized key aspects including internal audits, accident prevention efforts, and the availability of essential technical manpower. The findings raised significant concerns about Air India's adherence to safety protocols and regulatory requirements.

One of the major concerns identified was the inadequacy of the airline's accident prevention measures. The DGCA noted that the organization fell short of ensuring comprehensive accident prevention work, which is pivotal in safeguarding passengers and flight operations.

Another alarming discovery was the shortage of the required technical manpower, a vital element in maintaining aviation safety standards. Air India was found to be lacking in the number of technical personnel needed as specified in the approved Flight Safety Manual and relevant Civil Aviation Requirements. Furthermore, the DGCA found fault with the internal audit and spot checks carried out by the airline, stating that some of these inspections were conducted in a perfunctory manner, failing to meet regulatory requirements.

The DGCA’s investigation, which relied on CCTV footage, auditee statements, official records and passenger manifests that the inspections claimed to have been done internally at stations such as Mumbai, Goa, and Delhi were in fact not carried out and that false reports were generated after DGCA’s request. Air India has been facing regulatory heat for the past few months in several cases. Most recently the DGCA had directed AI to stop using its pilot training facilities in Mumbai (for Boeing) and Hyderabad (for Airbus) over deficiencies found in the simulator sessions conducted there. Later the airline was conditionally allowed to resume their use.

In response to these findings, the DGCA reviewed the action taken report submitted by Air India and subsequently issued show cause notices to the responsible post holders. Following the review of the responses received, the DGCA has directed Air India not to assign any audits, surveillance, or spot checks related to DGCA compliance to the auditor involved in the perfunctory inspections, citing a lack of diligence.

The suspension of Chief of Flight Safety, Captain Rajeev Gupta, reflects the gravity of the lapses identified during the DGCA's surveillance. It is a measure taken to ensure accountability and to emphasize the paramount importance of safety in civil aviation. This development underscores the DGCA's commitment to upholding the highest safety standards in the Indian aviation sector and serves as a reminder to all airlines to maintain rigorous adherence to safety protocols and regulations.

“We acknowledge and accept the DGCA’s finding and regret the failure of one of our audit staff to fully comply with the process and documentation requirements,” an Air India spokesperson said. “Safety is Air India’s highest priority, and we are investing heavily in people, processes and systems to raise Air India’s standards to best practice,” the spokesperson said. “We are sparing no effort to uplift the culture of safety and diligence to contemporary standards, through clarifying requirements, training and stricter consequence management. We will continue these efforts for as long as is needed to effect the necessary changes,” the company representative added.

In July, the regulator imposed a penalty of INR 30 lakh on IndiGo after it found certain systemic deficiencies in the airline’s documentation about operations, training procedures and engineering procedures. The regulator had also imposed a financial penalty of INR 20 lakh on AirAisa India in February earlier this year for violation of applicable DGCA Civil Aviation Requirements related to pilot exercises.

Tata-owned Air India and Vistara have asked for permission from their creditors to merge the two airlines. On Thursday, September 21, The Economic Times (ET) reported that creditors will vote on the proposal on September 23. Sources told ET that after getting approval from creditors, Air India and Vistara will move for permission from the Registrar of Companies and aviation regulator DGCA. The merger plan has already been given the nod by the National Company Law Tribunal (NCLT) and the Competition Commission of India (CCI).

Tata Sons and Singapore Airlines (SIA) filed a merger application with the CCI in April, stating that the amalgamation of Vistara with Air India would not change the competitive landscape or cause any appreciable adverse effect on competition in India. They had expressed hope to conclude the merger by March 2024.

According to the consolidation plan, Air India and Vistara will combine to form a single full-service entity, whereas Air India Express and AirAsia India will merge to form a low-cost airline, which will be a subsidiary of Air India. Singapore Airlines (SIA), which has a 49% stake in Vistara will hold a 25.1% stake in the firm. SIA will invest USD 267 million in Air India. Air India is wholly owned by Tata Sons, whereas Vistara is a 51:49 joint venture between Tata Sons and SIA.

As per the proposal, Air India will issue 3,702,338,129 fully paid-up equity shares to SIA at a face value of INR 4 each, priced at INR 5.56 per share.  The notice states that permissions will be sought from both secured and unsecured creditors. In most cases, banks are secured creditors, whereas vendors and lessors are called unsecured creditors.

Merger Preparations in Full Swing

The Tatas are keen to conclude the merger by March 2024 to unlock synergies, as stated by executives. Vistara has initiated aptitude tests for its staff and launched a culture survey to identify individuals suitable for key roles within the merged entity. This process includes the Hogan Test, designed by a US-based firm, to assess the normal personality characteristics necessary for job fit, particularly in leadership roles. Additionally, a unified salary structure and seniority lists have been established for pilots across all Tata Group airlines.

For SIA, which partnered with Tata in 2014 to establish Vistara, the merger represents a significant opportunity in the Indian market, currently ranked as the world's third-largest. Through the merged entity, SIA gains a foothold in both the low-cost and full-service segments, aligning with its multi-hub strategy. This merger positions SIA to tap into a market substantially larger than its home market, potentially ensuring its long-term viability. Importantly, after accounting for the capital injection, the total investment will not exceed 20% of the SIA Group's market capitalisation.

As of August 1, Air India had 74 Airbus and 53 Boeing planes in its fleet, according to aviation analytics firm Cirium. In February, Air India placed an order for 470 planes, with 250 from European plane maker Airbus and 220 from Boeing. This order represents the world's second-largest single-tranche aircraft purchase. The order with Boeing includes 190 B737Max, 20 B787s, and 10 B777s aircraft. The Airbus firm order comprises 210 A320 family aircraft and 40 A350 planes. A350, B777, and B787 are wide-body aircraft with larger fuel tanks, allowing them to cover long distances, such as India-North America routes.

As per the latest available Vistara has 5500+ employees including 2500 pilots and cabin crews. In the previous fiscal alone, the airline hired over 2,100 employees in the reporting fiscal. The airline currently has a fleet of 60 aircraft, including 46 Airbus A320neo, 10 Airbus A321neo and 4 Boeing 787-9 Dreamliner aircraft and has flown more than 42 million customers since starting operations. Earlier this year, the Tata-owned Air India, which recently announced a massive order of 470 aircraft with Boeing and Airbus, now plans to hire over 4,200 cabin crew trainees and 900 pilots this year.

(With Inputs from The Economic Times)

Boeing, the renowned American defense and aerospace firm, is currently in discussions with the Indian Navy regarding the possibility of procuring six additional P-8I maritime surveillance aircraft. This development comes as a testament to the successful performance of the 12 P-8I planes already in the Indian Navy's fleet, which have accumulated over 40,000 hours of flight time since their induction a decade ago.

Background

The Indian Navy's existing fleet of 12 P-8I aircraft, strategically stationed in Arakkonam, Tamil Nadu, and Goa, was acquired through two separate deals with the United States, amounting to over $3 billion. These aircraft were procured to bolster the Navy's capabilities in anti-submarine and anti-surface warfare, as well as to fulfill crucial intelligence, surveillance, and reconnaissance (ISR) roles in the vast maritime domain.

P-8I: A Military Derivative of Commercial Excellence

The P-8I is a military adaptation of Boeing's 737-800 commercial aircraft, renowned for its reliability and versatility. This derivative has proven itself as a formidable asset for the Indian Navy, delivering unmatched surveillance and reconnaissance capabilities in the Indian Ocean and beyond.

Enhanced Maritime Capabilities

According to Dan Gillian, Vice President of Mobility, Surveillance, and Bombers at Boeing Defense, Space, and Security, the addition of more P-8I aircraft to the Indian Navy's fleet will significantly enhance its maritime capabilities. These aircraft are equipped with cutting-edge technology, making them well-suited for monitoring and responding to threats in the maritime environment.

Economic Impact and Aatmanirbhar Bharat Strategy

Boeing's commitment to India's Aatmanirbhar Bharat (self-reliant India) vision is evident in its contributions to the country's aerospace and defense sector. The company has already generated a substantial economic impact of $1.7 billion in support of the Navy's current P-8I fleet. With the potential order for additional aircraft, Boeing anticipates increasing its investments by another $1.5 billion. This move not only strengthens India's aerospace and defense industry but also aligns with the global trend of indigenization.

Salil Gupte's Perspective

Salil Gupte, President of Boeing India, emphasized Boeing's commitment to advancing India's self-reliance vision. He stated that as they respond to the Indian Navy's demand for more P-8I aircraft, Boeing is actively exploring opportunities to enhance engineering, manufacturing, and sustainment capabilities within India, benefiting both the Indian and global aerospace and defense customers.

Conclusion

Boeing's exploration of a follow-on order for six P-8I maritime surveillance aircraft reflects the success of their existing fleet and the company's commitment to bolstering India's maritime security. This potential procurement not only enhances the Indian Navy's capabilities but also contributes significantly to the Aatmanirbhar Bharat vision by fostering indigenization and economic growth in India's aerospace and defense sector. With Boeing's steadfast dedication, India is poised to strengthen its maritime presence and security in the years to come.

With Inputs from Hindustan Times