Indian Defence Review

An ATR-72, a typical turboprop aircraft. (Photo © Felix Gottwald)

A third “U.S.-India Aviation Summit” was held in October 2013 in Washington, D.C.  India sent a distinguished delegation, led by Ajit Singh, Minster of Civil Aviation, Arun Mishra, Director General of Civil Aviation, Y.S. Bave, Chairman of the Airports Economic Regulatory Authority of India and V.P. Agrawal, Chairman of the Airports Authority of India.  The U.S. responded with Cabinet officers from the Departments of Transportation and of Commerce, and the heads of the Federal Aviation Administration and the Transportation Security administration.

This impressive gathering spoke to the enormous promise as well as the daunting challenges of civil aviation in India.  India is seen as a huge untapped market for both domestic and international air travel, as well as for cargo and private aviation.  Many forecasts anticipate continued growth in civil air traffic and expected demand for many hundreds of new aircraft worth tens of billions of dollars.  Also recognized are the serious restraints on India’s aviation infrastructure.  There are not enough airports and not enough carrier capacity to service growing demand for air travel to non-metro, “Tier II” and “Tier III” cities.

Even if one submits to optimism, and postulates the achievement of new airports and improved infrastructure, how are domesticcarriers to add necessary capacity tailored for these emerging markets? How can India participate in the supply of the hundreds of new airplanes and in maintenance and support of its growing domestic fleet?

Today there is neither a coherent nor a realistic national program to answer either of these multi-billion dollar questions.  Yet there is so much at stake.  A commercially viable domestic aviation industrycan offer long-term technical and manufacturing employment for thousands.  If India can contribute to the supply chain for the new aircraft its carriers will acquire in coming years, it will help India to manage balance of trade and current account deficit risks and promote national economic growth.

Viewing Government pronouncements over recent years, many airplane initiatives have been touted.  Few have made real progress.  Among this field, however, one prospect shines with opportunity.

A decade ago, Government sources announced intent to develop the “RTA-70,” a Regional Transport Aircraft.  Then, it was to be powered by turboprop engines, designed by the National Aerospace Laboratory with Hindustan Aeronautics Limited (HAL) envisioned for the production role.  As of now, it is only a “paper airplane.”

In December 2006, HAL announced a $700 million joint venture with a Russian company to manufacture a Multi-Role Transport Aircraft (MRTA).  Intended primarily for military purposes, the MRTA was to be jet-powered, carry 18-20 tons of payload or 100+ soldiers, and have a range approaching 3,000 miles.   A “framework” agreement reportedly was signed in October 2012 between HAL and the Russian partner.  Supposedly, 150 designers are working on the plane’s design.  A first flight in 2017 has been promised.  But seasoned observers of aerospace in India know to limit trust to what is verified by observation and demonstration.  Evidence of actual progress on the MRTA is scant.  In any case, it never was realistic to propose to develop a “heavy” military transport aircraft, using advanced technology, for $700 million.  Embraer is reported to expect to spend nearly $2.5 billion to complete development of its KC-390 military transport.  Moreover, if the MRTA aircraft somehow were brought to market, it would compete against established alternatives, such as the Lockheed Martin C-130J, the Airbus A-400M and Embraer’s KC-390.

Another collaboration with Russia also figures into the equation.  India has announced a partnership with Russia to share design, development and production of a Fifth Generation Fighter Aircraft (FGFA).  If this project proceeds, its forecast cost of $35 billion, for 200 fighters, would be much greater than the $15+ billion that has been publicly identified as the price India has agreed to pay Dassault to buy 126 Rafale fourth generation “medium” fighters.

India announced the award to Dassault in January 2012 but the parties have yet to agree upon the commercial terms of the deal.  The problems may be more than contractual.  One question is whether India has sufficient funds, given the slowing economy and adverse effects of the rupee’s decline in value.  Another is the present sufficiency of India’s aerospace industrial base.  India has demanded that Dassault satisfy a huge “offset” requirement set at 50% of the Rafale’s purchase value.  Questions have been raised whether there is enough relevant and competent indigenous industrial capacity for Dassault to meet this obligation.  Reportedly, Dassault and HAL have been unable to reach an understanding on “workshare” division.

Last summer, the Ministry of Defence put out a $3 billion tender to replace 56 aging Avro transport aircraft, inviting eight foreign airframe makers to propose partnerships with the Indian private sector.  The first 16 aircraft would be purchased off-the-shelf, while the remaining 40 would be manufactured in India.

But this solicitation has proven controversial.  The invited foreign sources may decline to participate because the quantities are too small and co-production in India, on the terms required, may not be realistic.  Moreover, Minister of Heavy Industry Praful Patel has openly questioned the exclusion of the PSUs, suggesting a political push to move the project to HAL.  While it is only public sector unit possessing the relevant competencies, other Government officials have conceded HAL’s order book is full.  As a matter of history, HAL has had trouble finishing and fielding aircraft. Not until late December 2013 was the Indian Air Force able to induct the Tejas Light Combat Aircraft into operational service – nearly 30 years after program inception.

In July 2012, the Prime Minister’s office announced a commitment of $2 billion for the development of a new Regional Transport Aircraft (RTA), to be designed and built in India.  It would carry 70-90 passengers.  Should the RTA proceeds as a jet-powered aircraft, it will find itself squarely in a very crowded market in which competition is presented by Bombardier (Canada), Embraer (Brazil), Comac (China), Mitsubishi (Japan), and Sukhoi (Russia).  As a jet, the RTA will have no commercial credibility, if only because of the surfeit of competition.  For India’s specific needs, it has limited utility, since a jet is most unlikely to be capable of operation from short runways as needed to work routes to India’s under-served cities.

Yet – if properly executed – the RTA holds great promise.As a national initiative, India should champion a long-term program to design, develop, build and support a civil aircraft focused on India’s particular transport needs.  Such an aircraft need not fly fast, but it must be able to operate economically on routes under 1,000 km and from unimproved airfields with short runways.  This points to a next generation turboprop-powered transport aircraft.

Turboprops are undergoing something of a renaissance elsewhere in the world, largely as a function of continuing high prices for aviation fuel that reward the lower cost of operation (versus a jet) of a turboprop.  Indian carriers, the bulk of whom are “low cost carriers” operating with thin margins, no doubt share the motivation to employ next generation aircraft that are miserly in fuel use, as India has among the highest jet fuel costs in the world.  Today, the fuel used for turboprops enjoys a favourable advantage under national and State tax regimes.  And turboprops are comparatively miserly in the use of fuel.

But the dominant reason to look to a next generation turboprop is to answer the infrastructure problem.  However positive the Government’s intentions, it will take many years to add airports and improve infrastructure.  And the costs will be great.  India has announced a national imperative to improve air service beyond the key metro areas to provide more connectivity to Tier II and Tier III cities.  A modern turboprop does a better job to answer this demand than conventional jet transports.  With a suitably optimized design, this aircraft type can operate from shorter runways with less improved ground infrastructure, and can handle high altitude destinations well.  This comports with the Government’s new plans to expand airport connectivity by emphasizing, initially, new airports for lesser served communities that have runways too short for typical jets.  The lower operating costs and potentially reduced maintenance demands for turboprops also can translate into economies that will translate into lower ticket prices as budget carriers will seek to introduce air travel to more passengers.

Today, the Government is contemplating various regulatory and subsidy schemes to compel or encourage domestic air carriers to increase service to the Tier II and III cities.  These have their place, but are not long-term solutions, because such policies do not answer airport infrastructure constraints.A national program to develop a new airplane optimized for India may prove the right answer to India’s need to offer air carriage to more of its population – and to improve the balance sheets of domestic carriers.