Mr. Palash Roy Chowdhury

Air traffic has grown over three times in the past 10 years and is expected to triple again in the coming decade. Currently India is amongst the 10 largest aviation markets in the world and is expected to break into the top five before the end of the decade.

In your several years at the UTC group, how have you seen the industry evolve?

While the Indian aviation space has evolved significantly in the last decade, there is a substantial runway ahead of us.

Air traffic has grown over three times in the past 10 years and is expected to triple again in the coming decade. Currently India is amongst the 10 largest aviation markets in the world and is expected to break into the top five before the end of the decade.

The mid to long term fundamentals that are driving this growth continue to remain strong. We cannot also deny the fact that urbanization is happening at a very fast pace with over a million people being added to our cities every month coupled with the fact that the middle class is also growing. In the next 15 years, it is projected that India will add 30% of the global workforce. Additionally, the current penetration of the Indian Aviation is very less compared to even the other developing countries like Brazil and China, let alone the developed countries. So the only direction that the aviation industry can go is upwards.

Unfortunately though, India has not been able to capitalize on the fundamentals as much as it should have. This is mostly attributable to policy / regulatory challenges that put India at a competitive disadvantage compared to some of its neighboring countries such as Singapore, UAE and China. Countries around India have been able to effectively pitch their friendly business environment combined with proximity to India to attract global investments. The irony is that they leverage brand “India” more effectively, than India itself!

In summary, the Indian aviation sector will continue to offer significant revenue opportunities for global aviation players. Whether India can reap commensurate benefit for itself in terms of investments, technology growth, talent development etc. will depend on business friendly policies.

What are the challenges that the Industry faces today?

The challenges that the Indian Aviation industry faces today can be broadly grouped under two heads; Fiscal challenges; For example, if a company invests money in this country as FDI, can it expect a fair return? India’s complex and multi-tiered tax structure makes it difficult for companies to justify their business case. Today, it is sometimes more cost effective for airlines to service their fleets outside the country than doing it domestically. Countries like Brazil on the other hand have tweaked their tax structure to incentivize domestic manufacturing/MRO. India will be well served to emulate such best practices.

Additionally, businesses don’t like to deal with ambiguity. Policies like the GAAR, which introduce uncertainty don’t help the investment scenario.

The other category is the Operational hurdles. Land acquisition, lack of single window regulatory clearances, customs delays, lack of in-country logistics add to the cost of doing business.

What kind of work flows to the engineering setups that currently some aerospace companies are setting up in the country?

Engineering and ITES are bright spots for India. UTC started tapping into the Indian engineering talent pool around 15 years back. We have grown steadily and now we have more than 2500 people working on our global platforms either directly as UTC employees or through our long term partners. So service industry has been good. As far as Pratt and Whitney goes, we started at the low end with 2D to 3D conversions, drafting etc, but over the years, our trusted partners have come up the value chain and now they are fully integrated into our global product platforms. We continue to be bullish on service related processes here like IT, Engineering, Business Services etc.

How do you see the industry shaping up in the next 5 years?

As I mentioned earlier, we continue to be very upbeat about the mid to long term scenario. I think India will ultimately figure things out; the timing will be critical though.

Military aviation is growing significantly as well. India continues to be one of the largest importers of military hardware in the world and we heard about the increase in defense spending last week’s budget proposal as well. India will spend billions of dollars in hardware modernization in the coming years. This will lead to significant offset opportunities that the country can utilize wisely to promote critical infrastructure and technologies.

So I think we are at that inflection point. The government realizes that the industry can offer hundreds of thousands of highly paying and high technology jobs and can generate billions of dollars in foreign exchange and tax revenues. Aviation is a sector which not only provides direct employment but also affects a whole slew of other industries like tourism, homeland security, infrastructure development, logistics etc. Aviation is an integral part of nation building.

We have a very progressive civil aviation ministry and they have introduced numerous reforms in the last 18 months. We will continue to work in partnership with the government through industry bodies such as AMCHAM and FICCI to realize the vision of making India an aviation hub by 2020.

What kind of changes do you feel are required from the government to ensure a healthy growth rate for the industry?

First is to set up a benchmarking committee to understand and analyze what some of the most successful aviation destinations around the world are doing. There are some consistent practices followed by the likes Brazil, Poland, Singapore, UAE and Malaysia. The tax structures have to be rationalized so that working in India is at par with these destinations and there is a level playing field.

Incentives play an important role in attracting investments. Through tax sops, the IT industry in India grew so well and if India wants to develop into a true aviation hub, investment in this sector has to be incentivized.

Aviation is a high capital industry and requires a lot of physical assets like land; we should make it easy for companies to gain access to this land by the support of state governments and single window clearances. Access to low interest, long term financing is another area that needs attention.

Next, we need to focus on tier 2 and tier 3 cities. A vast majority of the total air traffic in India happens between few major destinations like Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore etc. Tier 2-3 cities offer the next growth opportunity. Route dispersal guidelines, essential services fund are some measures that promote regional aviation.

To many Indians air travel is still aspirational. India is very cost sensitive and cost of entry often plays a key role. We do not need super luxury airports everywhere. A network of low cost airports, high on operational efficiency, connected by low cost airlines will drive the next generation of growth.

Additionally, there have to be incentives to support the aerospace MRO and manufacturing sectors. There are several financial, legal and procedural limitations preventing the MRO industry from growing. It is estimated that over 90% of the $700M+ MRO spend went outside the country last year and this number is expected to grow to $2B by 2020.

There is an opportunity to establish a joint ministerial committee that explores the interplay of aviation with other sectors such as tourism, logistics, homeland security and infrastructure. Offsets, if properly planned can be levered to address some of the pressing infrastructure, technological and talent needs of the country.

What are Pratt and Whitney’s growth prospects in the near future?

Pratt & Whitney continues to be bullish in terms of growth in the mid to long terms in the region. We are definitely going to be very active in this part of the world and by saying that, I refer to the region from Middle East to India to South East Asia to China. Now it is incumbent upon India to attract these investments. We can support India sitting in either Singapore or Middle East or vice versa also. We have recently announced that we are investing in Singapore, but that’s not the end of our investments. How quickly and how much we invest in India will depend on the environment that the government creates for us. We shall continue to grow in the Services space and we are also setting up a training centre in Hyderabad, but as far as big ticket plans, MROs and factories are concerned, we have to see the industry mature a little bit more both in terms of operational and fiscal incentives.
We are talking to a lot of Indian partners and also have the military procurement in mind. So we are looking at all of these closely and wherever the opportunity presents itself, we shall be ready.

Tell us about your latest innovations.

  • Pratt & Whitney is developing and powering next generation propulsion systems and technologies that provide an immediate path to fuel efficiency, fewer emissions and noise reduction.
  • For more than 20 years, Pratt & Whitney has made significant investments in technologies like the Geared Turbofan™, and its Technology for Advanced Low Nitrogen Oxide (TALON) family of combustors. We will continue to meet industry environmental performance requirements through aggressively researching and testing alternative fuels, and other measures.
  • Pratt & Whitney has developed game changing technologies for the future, such as the PurePower® PW1000G engine, with patented Geared Turbofan(TM) technology, for next generation of passenger aircraft. The PW1100G-JM not only offers 15% reduction in fuel burn adding significantly to operator margins but it does so while reducing the noise footprint up to 75% and CO2 emissions by almost 3000 tons per year per aircraft. To put that in perspective, 3000 tons of CO2 equates to about 700,000 trees per year. The PurePower® PW1000G engine slashes aircraft noise footprints by up to 75% At up to 20 decibels below today’s most stringent standard, it is the quietest engine in its class. Meaning lower noise fees, shorter flight tracks, extended curfew operation, and quieter cabins.
  • Pratt & Whitney’s TALON™ X combustor slashes NOx exhaust gases 50% below CAEP/6.
  • Through its EcoServices LLC joint venture, Pratt & Whitney continues to offer its eco-friendly innovations by providing environmentally conscious services like the EcoPower® engine wash system. The service reduces fuel burn by as much as 1.2 percent, eliminates three pounds of carbon dioxide emissions for every pound of fuel saved, and increases the amount of time an engine can stay on wing.
  • If all airlines used EcoServices LLC’s EcoPower system, it would save more than one billion pounds of fuel and eliminate more than 3.2 billion pounds of CO2 from being emitted into the atmosphere each year.

Is availability of quality Human capital a concern area for you or is talent readily available?

From a service standpoint, there are good plug and play opportunities, but from an operations standpoint like an MRO / Manufacturing there is a shortage. Some capacity is available in the PSUs like Air India and HAL, but the pool is not totally up to speed on the latest western technologies.

As the sector grows focus is needed to develop a talent pipeline. Academic partnering with some of the Universities in the US or UK will help to develop a robust curriculum that targets this industry. Public private partnerships such as the US India Aviation Cooperation Program can be effectively leveraged for DGCA skills enhancement, bilateral certification and technology demonstration.

Offsets can also be used for skills development.

If we put in the effort then I don’t think developing talent in the next 3-4 yrs. should be a problem.

How is Mr. Palash Roy Chowdhury when he is not at work?

The weekdays are pretty much shot … I get to work by 8:30 and head home by 6:00. By that time the US wakes up and I am usually on call till late evening. I do make it a point to have dinner with the family at about 8:00.

On weekends, I love going on long drives and travel to weekend getaways around Delhi or visiting my family and friends. Having spent over a decade in the US, there is so much to reconnect and relate to in and around Delhi. My six year old twins were born in the US and to introduce them to all these things is fun.

I am also passionate about CSR and head UTC’s CSR program in India so that is another area I spend a significant amount of time on.

Mr. Sachin  BansalPalash Roy Chowdhury is currently the Managing Director (India) – Commercial Engines and Global Services for Pratt and Whitney and the Chairman of the American Chamber of Commerce in India-Civil Aviation Committee. Palash started his career in the oil and gas industry before moving to United Technologies Corporation, where he has been associated for over eleven years now, first as a Program Manager for Global Indirect Procurement and later as Country Manager for India, before moving to his current role. Palash is a Chemical Engineer from Mangalore University, post which he did his MBA in Supply Chain and Finance from the Michigan State University. He has also completed an Executive Education course from the University of Virginia-Darden Graduate School of Business Administration.

A travel enthusiast, Palash loves spending weekends by going on long drives with family and friends and visiting places in and around Delhi.

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