Wheels to wings

Mahindra Aerospace dreams of becoming the Embraer of India. Bibhu Ranjan Mishra gets a glimpse of the plan

The limelight at Aero India, which concluded recently in Bangalore, was hogged by the Tejas, India’s indigenous light combat aircraft. Tucked away in a corner of the biennial show was Mahindra Aerospace, the aviation arm of Mahindra & Mahindra. It had on display a small aircraft – the GA8 TC-320 Airvan — which it makes in Australia. It didn’t catch much attention. But two years later, in the next edition of Aero India, Mahindra Aerospace intends to make heads turn with the first aircraft designed and fabricated in India by the private sector.

The NM5, a five-seat aircraft, is being developed by Mahindra Aerospace in collaboration with Bangalore-based and state-owned National Aerospace Laboratories. The aircraft is actually expected to be ready by April next year, several months before Aero India. Much of the details are still under wraps. And nobody can tell whether or not the NM5 will be a commercial success. Still, Mahindra Aerospace has begun to think of the next logical possibilities.

Mahindra Aerospace wants to participate in India’s ambitious Rs 4,000-crore regional transport aircraft (RTA) project. “Will the government invite us to make the aircraft in collaboration with NAL? I think it should. We are more capable that anybody else, other than (state-owned) Hindustan Aeronautics Ltd,” says Mahindra Systech (a conglomeration of 18 Mahindra & Mahindra ventures including aviation) President Hemant Luthra with a cocky air. His vision is to make Mahindra Aerospace the Embraer of India — no less!

Will it get there? “Mahindra Aerospace plans to produce aircraft of up to 20 seats,” says Kota Harinarayana, former head of the Tejas project. Comparing its aviation strategy with the Tata group, he adds: “Tata is focused on the production of components and subsystems and has no plan to manufacture the full aircraft.” Nobody thinks it’ll be easy. “There is not enough knowledge available outside HAL on how to develop an aircraft platform,” says Ashok K Baweja, former head of HAL who now works as an aerospace advisor for an Indian technology firm. “But I am optimistic that Mahindra Aerospace with careful planning and execution will establish itself in aircraft manufacturing.”

Textron India Chairman & Managing Director NR Mohanty, who too has led HAL in the past, feels that Mahindra Aerospace is keen to leverage the offset requirements — all foreign aircraft makers who get orders from the Indian government are required to source a fixed portion of components from India. Indeed, Mahindra Aerospace is in the process of putting up an aircraft component manufacturing base at Narsapur near Bangalore. It has taken land at the upcoming aerospace SEZ near the Bangalore international airport to make components where it plans to invest about $70 million (around Rs 300 crore). That will also be the foundation for its own aircraft. The next step is to find out a hangar at an airfield where Mahindra Aerospace can assemble these components to develop an aircraft.

For Mahindra & Mahindra, the stepping stone into aerospace was the acquisition of Bangalore-based engineering services provider Plexion Technologies in early 2006 for $10 million. It soon found out that this small company, which sold engineering services to the aerospace industry, had more doctorates per square feet than a university or research centre. It had a strong manufacturing lineage because of the order it had got from an Australian company to work on 24 aircraft. “It did the turnkey job of taking somebody’s 2D paper drawings and giving back 24 complete structures,” says Karthik Krishnamurthy who joined Mahindra Aerospace business soon after the Plexion acquisition.

The next stop was Australian firms Gippsland Aeronautics (aircraft manufacturer) and Aerostaff Australia (component manufacturer) for $38 million. Plexion’s core aircraft design team was about 30. The Australian acquisitions have given gave Mahindra Aerospace another 40 to 50 people with experience of working on the shop floor. This includes Gippsland co-founder, CTO and designer George Morgan.

Gippsland already has two aircraft in the market — a two-seat agricultural delivery aircraft (GA200C) and an eight-seat aircraft (GA8 Airvan). It is developing a 10-seat aircraft with turboprop engine and has revived its plans for an 18-seat aircraft which was lying idle for some time. Mahindra Aerospace is also planning to come out with the amphibian variant of the air van.

The Gippsland aircraft are in service in 38 countries. So far about 165 of the eight-seat aircraft have been sold worldwide. Forty of these have been sold in Australia. These are used for parachuting, surveillance and law enforcement, aerial photography and short-haul freight etc. The aircraft is rugged — it has flown 19 hours non-stop on a single Lycoming engine, and the round-the-world flight of its pilots, Ken Evers and Tim Pryse, to raise money for malaria awareness has been captured by journals all across the world.

This is perhaps what convinced Luthra to make a pitch to his boss, Anand Mahindra, for aircraft design and production. In 2008, when he proposed to the Mahindra Systech board a partnership with NAL to design the aircraft with equal investment from both the sides and jointly owned intellectual property, Mahindra wanted to test his seriousness. “I told Mahindra that I don’t know whether the plane will be a commercial success or not — but I want to show the world that if Mahindra has done a Scorpio, it can do a plane too. He asked me if I wanted to spend Rs 30-40 crore just to show the world that we can do it. I knew he was just testing me,” recalls Luthra.

To take a decision to forge India’s first public-private partnership for the design and development of a civilian aircraft at a time when India has no past success in aviation was no less a risk for Mahindra. This was the time when everybody was talking about the delay in the Saras and Tejas projects. India’s first business jet, the Hansa, too could not take off in the 1970s.

The proposal for aircraft manufacturing got a boost from the survey it conducted with AT Kearney to understand the market for small aircraft. The study said that when aviation turbine fuel prices were low, there was a great demand for regional jets as they have to climb up to 30,000 feet. However, when the prices of aviation fuel were high, people were more interested in turboprops which fly at lower altitudes. “I am glad that I have a boss who is willing to take some chances to show to the world what India is capable of. He is a complete Indophile,” says Luthra. “It was still the early days. We were not thinking of failure because I believe that if you anticipate failure then you are going to become so conservative that you will never ever take any risk.”

Will the NM5 really take off? Wait and watch.