While the US-headquartered aerospace company hasn’t seen any drop in demand for its aircraft due to geopolitical conflict, Boeing’s senior vice-president Brendan Nelson said a protracted war in West Asia will hurt airlines.
Nelson, who was the defence minister of Australia during the previous Gulf war, is responsible for Boeing’s strategy outside the US and part of the executive council of the company.
“Without making any judgments about the decisions that countries make, the fact remains irreversible that global aviation transport, which itself thought that it shouldn’t be touched by any geopolitical conflict, is more and more getting embroiled in that. The biggest risk for our company is geopolitics and what’s happening in the world,” Nelson told ET in an interview.
Geopolitical conflicts like the US weaponising tariff for politics, has been categorised as a big challenge to the growth of global aviation.
Indian airlines have warned that the US and Israel’s war with Iran is weighing heavily on their finances, as demand for travel to West Asia-one of the highest growth regions for Indian carriers-has depleted significantly, while costs are increasing as airlines are forced to take longer routes due to the closure of airspace in Pakistan and West Asia.
“At the moment, as you know, the demand for our products, both our commercial and our defence products, is very, very strong, but any long-term conflict can ultimately result in lag in demand,” Nelson said.Boeing is likely to be one of the winners from the recent India-US tariff deal, with commerce minister Piyush Goyal saying that the aircraft orders from Indian carriers will be part of India’s commitment to acquire as much as $500 billion of American products over the next five years.
Nelson said Boeing had made a strategic decision early in his tenure to deepen its commitment in India, adding that the company will source more advanced aerospace products from the country.
Boeing’s sources materials worth ₹12,000 crore per year from more than 375 suppliers in India. The company’s engineering and technology centre in Bengaluru is its largest facility outside of the US. Its joint venture with Tata in Hyderabad employs 7,000 people.
However, Nelson ruled out setting up a manufacturing line in the country and building an aviation ecosystem first through maintenance, repair and overhaul facilities, training centres and supply-chain integration that could eventually support more ambitious manufacturing.
Its European rival Airbus has set up manufacturing lines to build military planes and helicopters in India, while Brazilian aerospace company Embraer is looking to set up one with the Adani group.