Home / News / India /  Freight conversion facility in India to add Boeing's $1 billion supply chain

Boeing Co will set up a facility in India to convert 737 passenger planes into dedicated freighters to tap into regional and global demand for the service, the company said on Friday. The deal adds to Boeing's $1 billion supply chain sourcing from India. 

The conversion facility would be set up in Hyderabad with Indian maintenance, repair, and overhaul provider GMR Aero Technic. He did provide any details about when the facility would be set up or the size of the investment, as per Reuters reports. 

The planned facility comes amid a push by Boeing to expand in India, including a $24 million investment to set up a logistics centre for airplane parts.

Speaking to media persons in New Delhi, Chief Strategy Officer Marc Allen said that the deal will also support India's ambitions to become a global cargo hub. It adds to the US manufacturer's expansion into India on top of a record plane order by flag carrier Air India. 

The investment comes despite a global economic slowdown that has weakened the global air cargo market. The International Air Transport Association (IATA) said global cargo demand in January fell almost 15% year-on-year.

Air freight rates are 28% below the levels seen at the same time last year, data provider WorldACD said on Thursday.

Salil Gupte, president of Boeing India, said there was a demand to convert more than 1,700 passenger planes globally into freighters over the next 20 years, with about 600 coming from Asia, Reuters reported. 

E-commerce demand and electronics manufacturing is growing in India, strengthening the outlook for freighters, he said. 

"So it is only fitting that we have the capability to have a line to make those freighters here in India, not just for India, but for the region and for the world," Gupte added. 

The dearth of travel triggered by the pandemic triggered a record-breaking scramble to convert older passenger jets into freighters. But analysts say that aircraft lessors could now be stuck with excess freighters, or be forced to cancel conversions, as cargo rates fall.


(With Reuters inputs)

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Recommended For You
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout