Forget airlines, this is where the next aviation boom lies

Summary: As airlines place record plane orders, a quieter wealth opportunity is emerging among India’s precision part makers that supply critical aircraft components to global OEMs like Boeing, Airbus and more. We spotlight six listed companies that are leading the charge. India’s aviation industry is undergoing unprecedented growth. That reflects from record plane orders domestic airlines are placing with global original equipment manufacturers or OEMs. Air India and IndiGo together have ordered close to a thousand aircraft in the last two-three years, a number comparable with the total fleet of some major nations. Yet, these planes will continue to roll out of Boeing and Airbus factories. That raises an important question: If India doesn’t build planes, can it still benefit from this boom? The answer is yes. While India does not make aircraft, it is still manufacturing thousands of specialised parts that go into building one. A number of smaller component manufacturers are becoming indispensable in the global supply chain and that’s where the next round of compounding in the aviation space could take place. The opportunity The aircraft supply chain is multi-tiered. To save costs, OEMs outsource design and manufacturing to suppliers across four levels. Tier-1 companies make major components and receive parts or subassemblies from tier-2 players. The vast majority of production in these levels rests in Europe and North America. Tier-3 and tier-4 manufacturers are the small machine shops that make thousands of critical parts and even software. This is where Indian players have embedded themselves, especially after Covid-19 that led to a supply crunch and forced many global manufacturers to shut shop. What accelerated the growth was Indian firms’ prior experience in other areas of manufacturing, such as auto or industrials. So even as they did not have a track record in aerospace ancillaries, their strong brand presence helped attract clients quickly despite the lengthy process—something the industry is well known for to prioritise safety and efficiency. Here are various parts of the chain where India is building a strong presence: Aerostructures (45–50 per cent of aircraft value): The skeleton and skin—fuselage panels, wing