IndiGo, Air India to source parts locally
It’s not uncommon for airlines to face challenges related to the global supply chain, and disruptions can affect various industries, including aviation. Relying on local suppliers for non-critical aircraft components is a strategy that some airlines adopt to mitigate the impact of such disruptions.
By sourcing certain components locally, airlines can potentially reduce their dependence on international suppliers, making them less vulnerable to global supply chain issues, such as shortages of spare parts. This approach can also contribute to the development of domestic industries and promote self-sufficiency in critical sectors.
In the context of New Delhi and Indian airlines, it’s a response to the ongoing challenges faced by the aviation industry. The decision to turn to local suppliers for non-critical aircraft components suggests a proactive effort to address the immediate supply chain issues affecting flight operations.
It’s worth noting that the aviation industry is highly regulated, and safety is of paramount importance. Therefore, any shift in suppliers or sourcing strategies is likely to be carefully considered to ensure that it meets safety standards and regulatory requirements.
The trend of turning to local suppliers for non-critical aircraft components, as seen in the United States, appears to be gaining traction in the Indian aviation sector as well. According to executives at Air India and IndiGo, the adoption of this trend is driven by the potential for cost and time benefits for the carriers.
Sourcing components locally can offer several advantages for airlines:
- Cost Savings: Local suppliers may offer competitive pricing, and by reducing reliance on international suppliers, airlines may be able to manage costs more effectively.
- Time Efficiency: Local suppliers can often provide quicker turnaround times for the delivery of components compared to international suppliers. This can be crucial for minimizing downtime and disruptions to flight operations.
- Supply Chain Resilience: Relying on local suppliers enhances supply chain resilience, reducing vulnerability to global disruptions and supply chain challenges. This aligns with a broader trend seen in various industries toward building more resilient and diversified supply chains.
- Supporting Domestic Industries: Choosing local suppliers supports the growth and development of domestic industries, contributing to the overall economic health of the country.
It’s important to note that while this trend offers potential benefits, airlines will still need to ensure that the components sourced locally meet stringent safety and regulatory standards. The aviation industry places a high priority on safety, and any changes in sourcing strategies must adhere to industry regulations and guidelines.
Overall, the adoption of this trend in the Indian aviation sector reflects a strategic response to global supply chain challenges and a recognition of the advantages offered by a more localized approach to sourcing non-critical aircraft components.
The substantial orders placed by Indian airlines for aircraft not only contribute to the expansion of their fleets but also have strategic implications for the aviation industry in India. The increased scale and size of the fleets enable domestic carriers to negotiate more favorable terms with aircraft lessors, leading to potential cost savings. Additionally, the use of local non-critical parts, as mentioned earlier, can contribute to significant cost savings, estimated to be over 40%.
The ability to negotiate favorable terms with lessors is a common advantage for airlines that place large orders for new aircraft. With a substantial order book, airlines often have more leverage in negotiations, leading to better leasing terms, including potentially lower leasing rates and more flexible agreements.
Moreover, the shift towards using local non-critical parts has the potential to enhance cost-effectiveness and operational efficiency. As highlighted by industry executives at the Aero MRO India 2023 event in New Delhi, the reduced reliance on international suppliers can significantly decrease the lead time for obtaining certain components. The decreased availability time, from six months to under 30 days, is a substantial improvement that can contribute to minimizing aircraft downtime and improving overall operational reliability.)
In summary, the combination of sizable aircraft orders, favorable leasing terms, and the utilization of local non-critical parts represents a strategic approach by Indian airlines to enhance their operational efficiency, reduce costs, and navigate challenges associated with global supply chain disruptions.
Sisira Kanta Dash, Air India’s Chief Technical Officer, highlights a practical aspect of the aviation industry where even seemingly small items, such as paper for printers or stickers on tables and various fixtures, are often subject to regulations. In aviation parlance, these non-critical parts fall under Part 21 of Parts Manufacturer Approval (PMA).
Part 21 outlines the regulations for the certification of aircraft and aeronautical products. It mandates compliance for sourcing products, appliances, and parts with applicable designs through authorized entities. This means that even for non-critical parts, there are regulatory requirements in place to ensure safety, quality, and compliance with standards.
Dash’s comment about importing paper used for printers in an aircraft reflects the regulatory framework that governs the aviation industry. While the focus on critical parts is paramount for safety reasons, the oversight of non-critical parts is also crucial to maintain overall standards and compliance.
The effort to use local suppliers for non-critical parts is part of a broader trend in various industries to promote domestic manufacturing and reduce dependency on international supply chains. However, any changes in sourcing practices must adhere to the regulatory framework to ensure that safety and quality standards are maintained.
It’s noteworthy that Dash mentions including clauses in leases specifying the acceptance of non-critical parts. This indicates a proactive approach by airlines to address these considerations in their agreements with lessors, reflecting the industry’s ongoing efforts to optimize operations, reduce costs, and enhance efficiency within the regulatory framework.
IndiGo’s initiative to seek approvals from the Directorate General of Civil Aviation (DGCA) for purchasing non-critical, non-structural items reflects a similar trend observed in the aviation industry. This proactive approach aligns with the broader industry efforts to explore local sourcing options for various components, including those considered non-critical.
Parichay Datta, Vice President and Deputy Head of Engineering at IndiGo, highlights the airline’s commitment to identifying and using indigenous non-critical, non-load carrying items for its aircraft. The in-house capability to manufacture such parts demonstrates a move towards greater self-sufficiency and a reduction in dependency on international suppliers for certain components.
The acceptance and approval process from aviation regulatory authorities, such as the DGCA, is crucial to ensure that the use of locally sourced non-critical items meets safety, quality, and regulatory standards. The fact that IndiGo has been actively pursuing this initiative for the past two years and has developed in-house capabilities indicates a strategic and well-thought-out approach to enhance efficiency and potentially reduce costs.
This trend not only reflects a desire to support local industries but also underscores the industry’s recognition of the importance of diversifying and securing supply chains for both critical and non-critical components. Overall, it represents a positive development in the aviation sector as it adapts to global challenges and seeks innovative solutions for operational optimization.
The approach of third-party or in-house production of non-critical parts is particularly beneficial for airlines operating older aircraft. As aircraft age, some small parts may become obsolete, no longer available in the market, or in short supply. In such cases, the ability to produce these non-critical components internally or source them locally becomes essential for the continued airworthiness and maintenance of older fleets.
The executives’ acknowledgment of this approach being helpful for airlines with older aircraft underscores the industry’s recognition of the challenges posed by aging fleets and the need for innovative solutions. It not only allows airlines to address the scarcity of certain parts but also contributes to the overall sustainability of their operations.
Furthermore, as the demand for these non-critical parts rises, there is a notable mention of the Indian maintenance, repair, and overhaul (MRO) industry preparing to build capacity for the same. This signals an opportunity for the MRO sector to play a pivotal role in supporting airlines by providing the necessary infrastructure and expertise for the production and supply of non-critical components.
Bharat Malkani, the President of the MRO Association of India, highlights the readiness of the association to pursue the building of small parts that are acceptable to the Indian airline industry. This willingness to contribute to the production of non-critical components aligns with the industry’s overall trend toward self-sufficiency and building domestic capabilities.
However, Malkani emphasizes the need for clarity from the airlines regarding what is acceptable in the initial phases of design and production. This request for clarity underscores the importance of collaboration and communication between airlines and the MRO sector. It’s crucial for both parties to have a clear understanding of the specifications, standards, and regulatory requirements for the production of these non-critical parts.
In the context of aerospace manufacturing, where precision and adherence to safety standards are paramount, early collaboration between airlines and MRO associations ensures that the produced parts meet industry requirements. It may involve defining acceptable materials, manufacturing processes, and quality control measures to ensure the reliability and safety of the components.
This collaborative approach can contribute to the success of initiatives aimed at building domestic capacity for the production of non-critical parts, supporting the sustainability and resilience of the aviation industry in India. As the industry continues to evolve, clear communication and collaboration between stakeholders will play a key role in shaping the future landscape of aviation manufacturing and maintenance in the country.
