Asian upstarts keen to tap into global aircraft industry

SINGAPORE / Reuters

Indonesia is about to roll out its first passenger plane, one of several smaller, homegrown aircraft being studied in Asia, designed especially for short hops across the region’s emerging markets, where air travel is booming.
State-owned aerospace firm PT Dirgantara Indonesia’s 19-seat N219, which cost $400 million and took just over five years to make, is scheduled to make its first flight in June and start deliveries in 2018.
South Korea is mulling a 100-seat aircraft, and India has considered a 70-90 seater.
Novices in a highly competitive industry, these largely state-owned manufacturers are betting on growing passenger numbers and an increase in short flights operated by small, efficient craft. The planned craft would be smaller than the Airbus 320 or Boeing 737, which seat between about 150 and 190 passengers.
Instead, they aim to be cost-effective, nimble alternatives to planes produced by Brazil’s Embraer, Canada’s Bombardier, and European firm ATR, a joint venture between Airbus and Finmeccanica.
But while countries see the launch of a commercial aircraft as an important economic milestone, designing an airplane from scratch is also an expensive gamble. Both China and Japan have struggled to create jets that sell.
The International Air Transport Association (IATA), which represents airlines, expects Indonesia will be one of the five fastest growing markets over the next 20 years. But the country also has many low-density cities where poor airport infrastructure has been a drag on strong demand for air travel.
Other emerging markets face a similar challenge, said Ade Yuyu Wahyuna, vice-president of business development and marketing at PT Dirgantara Indonesia (PTDI). Powered by two turboprop engines from Pratt & Whitney, a unit of United Technologies, Indonesia’s N219 is similar to the Airbus CASA CN212 that PTDI manufactured under license in the 2000s. PTDI says it has 150 commitments from small Indonesian regional carriers.
For its part, Korea Aerospace Industries (KAI), which develops and license-produces fighter jets and helicopters, has been studying a 100-seat passenger aircraft for more than a year, said an industry executive familiar with KAI’s plans. KAI would prefer to work with established Western aerospace firms if it goes ahead, this person added.
“We will initially start with mid-sized passenger aircrafts or business jets, instead of taking on Boeing directly with large-sized jets,” said a KAI spokesman, who added these remain mid to-long term plans.
Indian state-owned aerospace firm Hindustan Aeronautics (HAL) and research agency National Aerospace Laboratories (NAL) have both studied separate projects for a 70-90 seat aircraft. HAL and NAL declined to comment.
Industry executives said both are waiting for the Indian government to clarify its aerospace policy, especially on the taxation of aircraft and aircraft parts and the opening of smaller airports in secondary cities.