Thoughts on WINGS
Summarizing the landscape and future of Indian Civil Aviation
I recently got the opportunity to attend WINGS 2024 and that helped me clear a long-pending task of understanding the aviation landscape, particularly in India. The exhibition contained stalls from all kinds of players in the industry, ranging from early-stage startups to sector leaders. and the tarmac also had various aircraft parked that made for good photographs.
The civil aviation sector can be broadly classified into multiple tiers [1]. However, to get a better understanding of the ecosystem, it is useful to illustrate sectors such as R&D and startups as well. These have been shown using “clouds” as there is significant execution risk involved and their undertaking might only occasionally materialize. The cloud analogy also hints that these “shower” ideas or innovative products into the mainstream sector, once in a while.
The exhibits were from a wide variety of categories and have been summarized in Figure 2, with corresponding international entities also shown on the right for illustration.
The Clouds: R&D and Startups
Figure 2 starts with the R&D centres and startups as mentioned. The names on the right in these segments are well-established players and don’t need a second mention. Some of the most cutting-edge experimental undertakings, which require significant funding commitments, are performed in these organisations.
Both CSIR-NAL and HAL had large exhibits, with indigenous aircraft memorabilia such as the Saras and Tejas miniatures being sold as well. Discussions regarding both organizations and comparisons with Western counterparts are worth a separate article and would refer interested readers to the above links.
In this iteration of the exhibition, it was interesting to see a lot of upcoming startups such as ePlane displaying their products. There are many new entrants globally in the drone and vertical-takeoff-and-landing (VTOL) space, sometimes fully electric and abbreviated as eVTOL. Many Indian players have emerged in this segment, including Airark and Nalwa Aero (Figure 3). It is important to note that these are very much in the pre-revenue/prototype stage in India. The international counterparts in these domains are well-established names, with some that have begun more than a decade ago and performing urban trials. The upcoming decade would prove crucial for India to establish itself as a competitive force in this market. Indigenous players such as Pawan Hans do offer urban taxi services using helicopters at the moment and were present in the exhibition.
SaaS + Aviation
India has shined in recent times in the Software-as-a-Service (SaaS) space and there were multiple startups, particularly FlyPal and Bauddhartha, at the intersection of SaaS and Aviation, showcasing their products. FlyPal is much more established and caters to solutions focused on the Maintenance, Repair and Operations (MRO) space. Bauddhartha is an interesting concept and utilizes state-of-the-art VR and XR improvements to enhance training capabilities in the aviation sector. Both these are being run by industry veterans and hold great promise. The intersection of SaaS and Aviation also had exhibits from some well-established players such as SITA, eforsair and Viasat that might be familiar.
The Leaders
Civil aviation manufacturing is mostly driven by the “full aircraft” manufacturers and the engine manufacturers, the latter being a key component that requires thousands of assemblies. At the international level, these are brands that are synonymous with the sector as a whole. However, in India, there are few entities, with both HAL and ADA being government-controlled. Engine manufacturing also is being undertaken currently by Gas Turbine Research Establishment (GTRE) and Tata Advanced Systems (TAS), although the latter only focuses on critical engine components to the leading global manufacturers [2], analogous to Tata’s role in other sectors such as IT. The contrast between India and the world shows up in this segment, with many indigenous aircraft also still using engines from outside.
The Tier-1s: Products
Even here, the global product lines are quite well-known and have been competitive for decades, spanning robust electronic devices to large-scale propellers. Indian product lines are almost non-existent with some firms such as Timetooth and SAARC Cases being globally competitive despite all odds, although their use cases are relatively simple such as protective containers and vibration-damping seats. The Timetooth article [1] highlights Tier-1 product development in India as the need of the hour and also emphasizes some of the strengths India has such as low cost and a large design talent pool.
Other Tier-1s such as ApexPlus, working on radar simulators and inxee, offering aircraft parking assists, are deep-tech initiatives that are privately funded and slowly carving a niche for themselves in their respective domains. Even these required industry veterans working on them for years to start seeing tangible outcomes.
Tier-2s and Tier-3s: India’s Strengths
India is notoriously known as a “back office” in the IT sector, taking up a lion’s share of the offshoring efforts. A similar trend exists even in the civil aviation sector, with many OEMs utilizing Indian manufacturing setups for building key components and sometimes for build-to-specification (BTS).
The component manufacturing category does involve significant design cycles and is still dominated by some of the behemoths such as L&T and Godrej. In this space, Dynamatic is a publicly traded entity that specializes in making components such as wings and flaps, and very much relies on international collaborations.
Build-to-specification firms form a key component of the Indian ecosystem as the low material and labour costs entice international firms to outsource their manufacturing after the design process. There are many interesting firms such as SFO Technologies and Rossell Techsys that started in other sectors, sometimes even in tea estates, before moving to BTS.
Tier-4s: Raw Materials
As the adage goes “last but not the least”, raw materials are the bedrock of the aviation sector. Fuel additives, lubricants and so on are also products in some sense and sometimes require significant R&D efforts from chemical engineering companies. Due to the intensive capital requirements even for manufacturing, these have been the stronghold for family-run businesses and include a wide range of players in India, ranging from Reliance (RIL) to Swastik Oil, which was also seen at the exhibition. Firms such as Swastik, although not very popular, have established a strong foundation in the brake fluid and lubrications market, with in-house R&D and sales in dozens of countries.
International players in this sector are also widely spread. Relatively unknown players such as VSMPO-AVISMA maintain a near-monopoly in Titanium production and export from Russia. It is well-known that aircraft components rely on Titanium due to its lightweight, high-strength and rust-free nature despite the costs compared to other metals. Other firms such as AkzoNobel and PPG maintain global hegemony related to the paints and coatings of aircraft and trace back to even centuries in history.
MROs and Resellers
Also found in Figure 2 are MRO — Maintenance, Repair and Operations firms, that are actually a key part of the Indian civil aviation ecosystem. Even HAL had humble beginnings as an MRO firm, although it quickly moved on to build-to-specifications for British aircraft. There are large-scale players such as AIESL and Indocopters that handle most of the domestic traffic.
This is a crucial component for domestic aviation as airlines such as IndiGo rely on quick turnaround times. However, a good chunk of MRO-related activities is not even possible in India, with IndiGo claiming as high as 90% of the expenses having to be made abroad [3].
Global aviation does not rely much on these sectors for revenue. Despite this, maximum MRO revenue is in Singapore (ST Engineering) or Europe-based firms (Lufthansa Technik) as they have complete expertise to perform necessary activities. SEZs have been earmarked in India for MRO setup that will hopefully stimulate the growth of other categories as well.
There are also product distribution firms or resellers in India that help in the procurement of products, since they are mostly manufactured abroad, and help navigate the customs and international regulations. The exhibition saw stalls from players such as Maruthsakha and Kasstech (Figure 7) which perform these functions in India.
Training Academies
Given the count of training academy stalls in the exhibition, it is likely that it is a low-cost and high-return business, partly fueled by the large population and scarcity of jobs in India, a trend that is seen in several education verticals. Some firms such as TaraUAV have a combination of drone manufacturing and flight training as part of their offerings, perhaps in an effort to diversify their portfolio and create more sales funnels.
It is important to remember that civil aviation training can be very specific, particularly for MRO, where it is one of the bottlenecks for growth in that vertical. Also, firms such as Bauddhartha (discussed above) are bringing the “EdTech” angle to aviation-related training and hopefully making current methods more effective and accessible.
Atmanirbhar Bharat
The word “Atmanirbhar” translates to “Self-Reliant”, and is oft-quoted, particularly in the manufacturing domain. The “Make In India” campaign is an initiative by the Government to manufacture and assemble products in India and has created many initiatives to do the same. This is very much the need of the hour as it helps create employment, particularly in the manufacturing sector.
Many state governments had their stalls in the exhibition and Tamil Nadu’s stood out the most, which is not a surprise given the state is a manufacturing powerhouse [4]. They also had a category-wise breakdown of their MSMEs [5] and how active efforts are being made to grow each of them.
HAL has undertaken initiatives as part of this campaign, with less reliance on imports, recent tie-ups in the MRO space [6] and also showcasing their civil helicopters as part of the exhibition [7]. In addition, NAL has also focused on the manufacture of key components through strategic partnerships [8], which are transferred from the research initiatives.
Airlines and the Government
It goes without saying that some of the biggest exhibits belonged to the airlines, which showcased some of their best aircraft and recent contracts. With domestic airlines experiencing rapid growth rates [9] and initiatives such as UDAN that are focusing on expanding civil aviation to more towns and cities within the country, the sector is very much poised for a bright future.
Summary and Final Notes
In conclusion, WINGS 2024 provided a comprehensive overview of the diverse landscape of the civil aviation sector in India. The exhibition showcased a spectrum of participants, from innovative startups to established industry leaders, highlighting the dynamic nature of the aviation ecosystem.
Some interesting sectors such as the overlap of Software-as-a-Service (SaaS) and aviation exemplified by startups like FlyPal and Bauddhartha, showcase the industry’s embrace of technological advancements. Additionally, the article delved into the strengths and challenges faced by entities in each tier, emphasizing India’s role as a significant player in component manufacturing and build-to-specification firms.
The discussion on raw materials highlighted the critical role played by Indian companies in providing essential products for the aviation sector. The article also touched upon the MRO sector, focusing on its importance in the Indian civil aviation ecosystem and the potential for growth with the establishment of Special Economic Zones (SEZs) for MRO setups. Training academies and their contribution to aviation-related education were also acknowledged. The “Atmanirbhar Bharat” initiative, promoting self-reliance, was evident throughout the exhibition, with government initiatives, state participation, and industry efforts aligning towards fostering indigenous manufacturing.
Finally, the article recognized the prominent presence of India’s growing civil airlines sector along with the government undertakings in the exhibition, showcasing the industry’s vibrancy and potential for growth. With initiatives like “Make In India” and “UDAN”, the civil aviation sector in India appears well-positioned for a promising future marked by innovation, self-reliance, and substantial growth.
References
[1] https://timetooth.in/indian-aerospace-industry-where-are-the-tier-1s-2/
[5] https://tndefencecorridor.in/assets/tidco_directory_book.pdf
[7] https://www.airmedandrescue.com/latest/news/hal-promotes-made-india-initiative-wings-india
Conflicts of Interest
The author does not hold any direct equity related to the firms mentioned in this post. However, index funds, mutual funds or ETFs held by the author could have them in the present or future as contents and any statements regarding the firms in this article are made in good faith.
