Brazilian aircraft manufacturer Embraer SA has signed a second memorandum of understanding with Hindalco Industries, Aditya Birla Group’s metals flagship, as it seeks to identify local partners and suppliers.
This comes a little less than a month after Embraer and Gautam Adani-led Adani Defence & Aerospace signed an MoU on 27 January to manufacture regional transport aircraft in India. The collaboration aimed to develop a local ecosystem, including a final assembly line (FAL).
The MoU announced on Friday aims to identify possibilities in aerospace-grade aluminum raw material manufacturing to support Embraer’s industrial initiatives, the planemaker said in a statement.
“This joint action reinforces our focus to identifying local partners that can become our suppliers and, in doing so, accelerate the development of the Indian industrial base,” Roberto Chaves, executive vice president of global procurement and supply chain at Embraer was quoted in the statement.
India represents a strategic market for Embraer across all its business units, the company added.
The FAL will produce smaller aircraft suited for the country’s regional connectivity, Arjan Meijer, president and chief executive, Embraer Commercial Aviation, had told Mint earlier.
Embraer, the world’s third-largest civilian aircraft maker after US’s Boeing and European manufacturer Airbus, produces the Embraer Regional Jet and E-Jet families of narrow-body aircraft for short and medium-haul routes. The company also manufactures business jets, defence aircraft and agricultural planes.
If it sets up a FAL in India, it would be the first among the three global aircraft makers to assemble planes locally. Boeing and Airbus currently source components from Indian suppliers but do not have aircraft assembly facilities in the country.
Novelis already an aero supplier
Hindalco’s US subsidiary Novelis already supplies to the aerospace sector, an analyst pointed out, making the Indian company an ideal source aerospace-grade aluminium. “This existing capability and global presence could help Embraer build a reliable local supply chain as it expands its footprint in India,” said Suman Kumar, assistant vice-president for metals and mining at brokerage Philip Capital.
At present, privately-held Star Air, owned by Ghodawat Enterprises Pvt Ltd, is the only Indian airline operating an Embraer fleet, with eight jets. The Sanjay Ghodawat-backed airline is expected to place additional orders for Embraer aircraft in the coming days.
India has seen an increased push for regional connectivity through the UDAN Scheme. It subsidizes ticket fares and mandates price caps to make flying affordable and to push small-town connectivity.
Star Air, FLY91, IndiaOne, and Alliance Air are among India’s airlines focusing on regional routes. IndiGo, Akasa, and SpiceJet also operate on select routes.
Local production of aerospace-grade aluminium will reduce import dependency and address the raw material base in the supply chain, another expert said. “This will ensure that future aircraft programs can source key inputs domestically,” said Ashish Chhawchharia, partner and aviation industry leader at consultancy Grant Thornton Bharat.
“More MoUs are expected in avionics, composites, and MRO services, as Embraer builds a complete ecosystem. This creates opportunities not only in aviation but also in metals, engineering, and IT services,” Chhawchharia added. MRO is short for maintenance, repair, and overhaul services.
