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PROJECT REPORT

xxxxx AEROSPACE PRIVATE LIMITED

INDEX (CONTENTS)
SL. PARTICULARS
NO.
1. Introduction
2. Promoter’s Profile
3. Market Scenario
4. Procurement of Raw Materials
5. Cost of the Project
6. Means of Finance
7. Financial Statements:
a. Projected Balance Sheet
b. Projected Profitability Statement
c. Projected Cash Flow Statement
d. Statement Showing the Re-payments/
Interest on Term Loan
e. Calculation of Debt Service Coverage
ratio
f. Schedule of Fixed Assets
g. Schedule of Direct, Admin & Selling
Expenses
H. Computation of Working Capital

1. INTRODUCTION

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Nothing in this world is more powerful than an idea whose time has
come.
-- Victor Hugo

We feel pleasure to introduce ourselves, our Company xxxxx


AEROSPACE PRIVATE LIMITED has been recently
incorporated .The new company has come forward and
proposed to carry aero- industry activities at initial stage and
also our company XXXXX AEROSPACE PRIVATE LIMITED
are planning to develop/ manufacture small aircrafts, regional
Jets, Business Jets and also to organize Transportation services
like Main airlines, Feeder airlines, Air Taxi and Aero-tourism. .
We are pleased to list our main aero- industry service activities.

a) To carry out and conduct Maintenance Repair and Overall


facilities ( MRO ) , intense pressure to reduce the cost of engine
servicing and improve turnaround times. Overall, the MRO business is
about estimated at by various experts to be worth $43-$45 million for
one hanger.. The engine portion is around $12.2 million, according to
Aero Strategy. and their designated MROs, as well as independent
repair stations, have devised ways to cut costs and make themselves
more marketable in the highly competitive and potentially lucrative
engine services.

b) Air frame structural testing and Air craft fabrication.

c) To run Pilot training school

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d) To act as advisers and or consultants in Automation equipments,
control systems, data acquisition system, and Telecommunication
equipments and instruments including Computer Aided Designs
( CAD ), Computer Aided Engineering ( CAE ) and Computer
Aided Manufacturing ( CAM ) relating to Air craft servicing
activities and also manufacturing activities and make available
personnel and services of every kind in relation to any
engineering industry, computer software, information technology,
Computer hardware, data processing, computer engineering,
system and management analysis, IT products and Intranet and
Internet Services.

The field of aerospace has been investigated for centuries but it can be
said that modern aerospace began with the first powered flight at Kitty
Hawk on December 17, 1903, by the Wright brothers. From there,
aerospace has grown to be one of the most exciting, diverse, and fast
paced fields of today. From the hot-air balloons of 18th century to the
first wood-and-cloth plane of Wilbur and Orville Wright to the first trip to
the moon on Apollo 11 to the new and exciting aircraft being developed
by companies like Boeing, Airbus, and Bombardier, aerospace has
come a long way in a little over a century

The company XXXXX AEROSPACE PVT LTD is planning to


achieve good target first year itself, In response to carry above
aero-industry service activities, The above company has to
purchase/ procure about 700 acres land from city outskirts is

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more than sufficient to establish MRO facility of XXXXX aviation
and other service activities , to setup plant & machinery , to
construct factory building and to take lease two or three small
aircrafts for training .. On account of this requirement, XXXXX
AEROSPACE PVT LTD approached bank for sanction of Term
Loan to the extent of Rs 122.5 crores and working capital
requirement to the extent of Rs 50 crores.

Capital Investment of Rs 122.5 crores will be required to


effectively compete with well established business players
from Singapore, China and other Asian countries.
.

2. PROMOTER’S PROFILE

1. Sri. TRIPATHY
CHAIRMAN.
Age: 42 years

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Qualification: Advance Degree Aerospace Engineer (MSc)

1. Mr. Tripathy is an Aerospace engineer having rich experience in

aircraft design, development, manufacturing, testing, and simulation.


He had worked with NAL, HAL, ADA, EMRC, CSM, and QUEST for
last 19 years and interacted with many international product
developers like MSC-USA, Dassult-FRANCE, and Computational
Dynamics -UK for the digital product development in many other
engineering applications to his credit. During the process he could
able establish lot of R&D process and digital product development
technique to reduce product time frame to market. He has provided
solutions to AIRBUS, BOING, TOSHIBA, HITACHI, and Rolls-Royce,
GE directly or indirectly for the last few years through ex-employers.

In Indian scenario he had contributed lots for the HANSA (Two


seated Aircraft), ALH (Helicopter) and LCA (Fighter) for the
aerodynamic and structural design, validation, optimization and
flight testing programs. Mr. Tripathy is life member of
Aeronautical Society of INDIA.

He has been engaged in this business more than 10 years. He is having


enormous experience in this business and his first motive is to procure
more orders/demands for product and to expand servicing capacity at
lesser cost and to maintained good quality service for reaching to global
standard.

CURRICULAM VITAE
Tripathy, A M Ae, S I., B.Tech, M. Sc-(ENG), Perusing Phd in Germany
MBB
Life Member of Aeronautical Society of INDIA,

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Chairman – XXXXX Core Engineering Technologies Pvt Ltd
Chairman – XXXXX AEROSPACE PVT LTD
Technical Advisor of XXXXX Global Solution, Bangalore.
Technical Advisor for DASK System Solutions Pvt Ltd, Bhubaneswar
Chief Advisor for Many Technical Universities and Engineering Colleges
Chief Advisor for many SME’s
Current Location: Bangalore
Vision to lead a organization where following target can be achieved:-
To look after the Marketing, Consultancy, Development and
Training applied to the field of, aerospace, automotive, railways,
heavy engineering, etc… using state of art technique on
CAE/CFD/PLM from MSC/CD/Dassult respectively.

Title: CAD/CAM/CAE/CFD expertise in


AERO, AUTO, HEAVY Engineering
system design, analysis, validation.
Work Experience: 18years
Skills: MSC-NASTRAN, PATRAN, CATIA,
NISA, ELFINI
Current xxxxxx Software Technologies,
Organization: Bangalore
Previous XXXXX , CSM Software Pvt Ltd,
Organization(s): EMRC, ADA, NAL
Industry: Engineering CAD/CAM/CAE/CFD
application product
Highest Degree B.Tech, M.Sc( Engineering)
Held: ( Aerospace)
Gender: Male
Date of Birth: 16th Sept. 1967

Short Tenure History of employments


Duration : - March 2008 - Till date
Working with xxxxx Group of Companies to take care of all engineering
activity with regard to Product Design Life Cycle implementation.
(Director(Tech), - Banagalore
Duration : - June 2007 – March 2008
Working with QUEST, Bangalore to execute, manage the TOSHIBA,
HITACHI, GE, etc… – Turbine automation program effectively with
CAD, CAE, CFD and e-Engineering team. Expertise in product life
cycle management tool implementation using cutting edge
technologies for the different kind of product development life
cycle requirement.

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Duration : - May .2005 TO June 2007 -
XXXXX
(Worked with Nei and Ne –NASTRAN development team (USA &

JAPAN) to customized it to INDIAN industry User friendliness)

• Business development (Target Driven).


• Understanding Clients requirement and fulfilling it.
• Project estimation, execution, report preparation and delivery.
• Training on new areas of application and customize the team
to face client’s requirement challenges.
• Quality assurance
• Client satisfaction
• Good team management for long-term achievements.
• Recruitment and onsite placement.
• Frame the suitable terms and condition for project life cycle to
complete.

Duration : - Sept.2000 TO May.2005 - CSM, Bangalore (Expertise in


Product Life Cycle Management applied to Product Develoment life
cycle).
(Worked with Dr.R Swami Narayan Swami founder and developer of
CSA Nastran to understand CSA NASTRAN & MSC software product,
Computational Dynamics CFD Technology and Dassult complete digital
product development, manufacturing, tools to suit the INDIAN Industries
customization interacting with USA, UK and France development team).
• Guided many Aerodynamic, turbo machinery projects in CSM
and trained beginners to understand the concept of CFD i.e.
incompressible, compressible, turbulence models.
• Guided services group to complete the aircraft, helicopter
analysis from the structural (structural life cycle) point of
view.
• To technical support 300+ customers from software training on
MSC, CD, Dassult ( Patran, Nastran, Marc, Dytran, Fatigue,
Adams, etc…, Star-CD, Pro star, pro-am etc…, Catia, smar team,
inovia, delmia etc…).
• To execute academic training/ validate them for industry /place
them in industry.

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• Support pre and post sale activity ( Demo, bench mark of product,
installation and training on customer site)
• Pre-post services activity ( Technical liasioning with industry in
India and abroad to get sufficient amount of engineering work on
CAD,FEA,FEM are to support the services division).
• Internally support technical manager, business development
mangers to achieve the yearly target of individuals and manage
around technical 20 technical entry-level experts.
• Taking a target to support a business of Rs 20 corers.
• Responsible to recruit good technical/non technical people inside
the organization

Duration : - JULY 1996 TO July 2000 – EMRC, Bangalore ( Expertise in


software life cycle management)
( Worked with Dr.Kant Kothowala founder of EMRC and
development, support team at Troy, USA)

• Involved in Development, testing, maintenance of NISA family of


Finite Element Programs.
• Sales, Technical support, Training on NISA different modules of
NISA
• Complete business development charge of Eastern India

Duration : - 24th JULY 1995 TO July 1996 - ADA, Bangalore


( Expertise in product development, manufacturing & Testing)
INVOLVED WITH WEIGHT REDUCTION PROGRAMME OF LIGHT
COMBAT AIRCRAFT as Design Engineer.
Duration : - 24th JULY 1995 TO July 1996
Place : - HINDUSTAN AERONAUTICS LIMITED,
(LCA COMPLEX BANGALORE)
BANGALORE
( worked with Dr.Srinath, Dr. TGA Simha, Dr.T.G.Pai, Mr.Dwarikanath,
Mr. A Hakkim )
Project details:- Detail analysis of front fuselage of LCA.

Duration : - 15th Mar. 1995 TO 23RD JULY 1995 - HDB, Bangalore


(Expertise in product development and real life testing)
Paper published :-
“EFFECT OF HORIZONTAL TAIL SETTING & EMPENNAGE SIZING
ON LOADS BASED ON FLIGHT TEST RESULT.” As Design
Engineer
Place: - HINDUSTAN AERONAUTICS LIMITED, (WITH GERMAN

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CONSULTANS), BANGALORE
( Worked with Dr.Manjuath, Mr.B.P. Rao, Mr.V.T. Nagraj, Dr.
Balasubhramanium and German Consultant )
Project details

Duration : - 1993 Sept. to 14th Mar 1995 - NAL, Bangalore


( Expertise in software development and validation with product
testing)
Worked as Project Asst.
“INTEGRATION OF GRAPHICS MODULE WITH QUICK BASIC
VERSION OF STAN5”
Place : - NATIONAL AEROSPACE LABORATORIES,
BANGALORE
( Worked with emeritus scientist of National Aerospace Laboratories,
Bangalore to name a few Dr. B.R. Pai, Dr. Mrugeshan,
Dr.M.D.Manickam, Dr.Sundaram, Dr. S.Majumdar and Prof.
Sundarnaygam(IISc)

Duration : - 1990 Sept. to 14th Sept 1993 - IIT, Chenaie (Expertise


in classical method and software development)
Project handled as Project Asst.
Completely involved with IIT, Madras aerospace department to execute
the design analysis of ALH, LCA, LTA and study the aerodynamic,
structural, aero-elasticity behavior based on classical methods of
engineering and in house developed programs in the sole guidance of all
emeritus academicians and scientist of the premier organizations.
Duration : - 1990 Sept. to 14th Sept 1993
Place : - INDIAN INSTITUTE OF TECHNOLOGY, MADRAS

2. Sri. T. RAVI KUMAR


MANAGING DIRECTOR.
Age: 48 years
Qualification: Post Graduate

Mr. Ravikumar is well established business man by profession


for last ten years and engaged in major construction activity. He

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laid mile stone starting from land acquisition till hand over the
project to the customer with fullest satisfaction. The projects are
highly appreciated by customer and also govt. agencies and
financial agencies too.

3. Smt. T.R.L. PADMAVATHI


DIRECTOR.
Age: 38 years
Qualification: Graduate

Mrs.Padma is well known for her hospitality services for the


working professionals. She has established high quality
credibility in the IT community for such activity.

4. Smt. AMITA MOHAPATRA


DIRECTOR.
Age: 39 years
Qualification: Post Graduate

Mrs Amita is very good public relation and human resource


management. She was helping many of the companies to
develop their public relation and human resource rules for the
many small and medium entrepreneurs.

5. Dr DASH
Chief Executive Officer

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Who I am?

I am basically a civil engineer. I graduated from UCE, Burla in 1969. I did


my M.Sc in civil engineering at IISc, Bangalore in 1972. I completed my
Ph.D in aerospace engineering (Thesis on random vibration) in 1979.
However I joined NAL in 1977 in the fatigue and fracture group. I spent
my entire career in the field of fatigue and fracture and retired as the
head of Structural Integrity Division, NAL in November 2007. At NAL I
started my career in full scale fatigue testing of fighter aircraft required
for life extension of ageing aircraft fleets of IAF. In early 90’s NAL
launched a program to develop a 2-seater all composite aircraft suitable
for pilot training. I planned and executed the entire structural tests
required to get the “type-certificate” from DGCA. This was the beginning
of my education in airframe design and structural integrity. This plane,
christened as “HANSA-3”, is certified by DGCA. NAL, by then, was
already developing the 14-seater commuter aircraft “SARAS”. I took the
responsibility of fatigue and damage tolerance design of SARAS
airframe and the full scale structural tests. This activity is still continuing.
A major part of the assignment had been completed by the time I retired.

NAL has retained a group of aircraft designers who have retired from
HAL and formed a design company (Aircraft Design and Engineering
Services) for the design of HANSA-3 and SARAS. Beyond the design,
the rest of the steps are done through NAL’s in-house strength
(Analysis, testing etc).

During my work on HANSA-3 and SARAS project I got to know each one
of the retired design engineers and worked closely with airframe
designers. I found, during my structural tests on airframes (HANSA-3
and SARAS) that their prediction of structural response was very close
to my test results unlike the predictions made by FEA specialists

of NAL. Over a period of time it dawned on me that these “HAL-old-


guards" are world-class aircraft designers. But the saddest part of the
story is that they never got a real chance to demonstrate their capability
neither at HAL nor at NAL. Throughout their professional career (at HAL
& NAL) their in-experienced bosses dictated the terms.

During my exposure to HANSA-3 and SARAS aircraft developments I


realized that a lot of improvement can be made to the airframes I
developed a clear understanding of how to develop a lean-airframe with
the desired safety level. But I could not push-through my ideas at NAL. It
was stuck in “traditional thinking”. This negative experience at NAL

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gradually prompted me to think of developing aircraft outside the ambit
of NAL or HAL.

In the year 2003 I was getting more and more convinced to come out of
NAL and develop a world class aircraft. But it has to be a team work. I
and my group have the capability of structural analysis and testing. I
needed support in all other areas to bring out an aircraft. I identified one
key person in each of the areas of aircraft development and talked to
them separately about the feasibility of my idea. The question of
investment was not in mind yet. I was more keen to understand the
technical feasibility. Each one of them were keenly interested to be a
part of developing a world class aircraft. Each one of them was excited
to join me if I started an aircraft company to build aircraft.

In 2004, I knew I had a team to design and develop a world class


aircraft. The next thing that came to my mind: well! Who is going to buy
my aircraft? If I could be sure of selling a few then I have cash-inflow
and I can dare to talk to investors. There was no easy and straight
forward answer to this question. There is a good possibility of selling but
I could not be sure of the time frame.

To solve this problem I started thinking of starting a pilot training school.


I talked to a key-person in Bangalore Flying Club. According to him, with
20 aircraft we can train 160 student pilots in one year and get them
DGCA-certified. The training fee is Rs 15 lacs per student. Therefore,
there is a revenue of 160XRs 15 lacs = 24 crores/year. What was more
appealing from my point of view was that I don’t have to worry
about selling my first 20 aircraft. I will use them in my own flying
school. The idea of starting a pilot training school, thus, got germinated.
Of course, starting a pilot training school has its own challenges. But all
these can be met. I have worked them out. I have a retired chief test
pilot from IAF who will be the Director of my flying school. I have worked
with him at NAL.

While, a pilot school solves the initial problems of my aircraft


development business, how do I sustain it? I need to diversify.

This was the time (2004-05), the aviation industry was booming in India.
All the airlines together had placed firm orders for aircraft for a whooping

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Rs 135,000 crores. Aircraft to be delivered by 2012. This struck me and
made me ask the question “can’t we develop our own aircraft to meet
our own requirements?” This gave birth to the mission statement of
my company XXXXX .

“To design and develop all the aircraft to meet the civil
requirements of the country by 2030”.

We can build aircraft as good as that made by Boeing and AirBus. It is a


tall order then why not?

As I have stated earlier, we start in the first phase, with developing 2-


seater and 4-seater aircraft to meet flying school requirements. We need
to build upon this capability to meet the mission requirements in a
phased manner.

In the 2nd phase we need to look at general aviation aircraft and air-
transportation market in India. This market is practically non-existent in
India. Passenger and cargo services in Tier-II and -III cities, air-taxi,
aero-tourism, air-ambulance, business and executive jet transportation
fall into this category. The potential is huge. We have to make it
affordable: even much more than what Capt. Gopinath did with Air-
Deccan.

My 2nd mission statement aims at fulfilling this ambition.

“to run air-transportation services using my own designed aircraft,


flown by my own pilots trained in my flying training institute,
maintained at my own MRO hangars by engineers trained in my
own AME training schools”.

This way I minimize my aircraft acquisition cost as well as life-cycle-cost.


This will enable me to reduce the air-fare well below the Air-Deccan-
level.

By restricting to Tier-II and III cities I eliminate competition with


established players. In stead I serve the vital purpose of a feeder-line.

With a proper strategy I can develop this market in India which will
sustain my aircraft industry.

The idea of starting a very passenger centric air-line service came, in


part, through a chance meeting with the founder of Air India Express. He

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is quite prepared and eagerly waiting to take charge of my air-
transportation business.

While I have the technically competent people to realize the two mission
requirements, financially it is a daunting task. In addition both these
require long lead time

To make my mission a financially viable proposition I have organized by


business concept in the following way:

Short term (1-year) plan:

1. Training for aircraft engineering services outsourcing


2. Taking up aircraft engineering services outsourcing jobs from HAL,
NAL as well as foreign big aircraft companies

Medium-term (3-years) plan

1. Setting up a pilot training school


2. Setting up of an MRO hangar
3. Setting up an AME training institute
4. Establishing the aircraft design and engineering center
Long-term (> 3year) plan

1. Initiating the air-transportation operations


2. Establishing an aircraft design and development institute

There is a great deal of synergy between these three plans. With out
synergy we will not have sustainable competitive advantage.

It is noteworthy that each of the above mentioned business aspects is


not considered (by me) as an independent business vertical. If it were
so, then we will be like anybody else in the aerospace field and not
“somebody to reckon with”

Our training program, in the medium and long term, will provide the
technical manpower that we need for our aircraft development. It is a
filtering process through which we will select the people that we need for
our work. “Persons who can work as a team”. I do not plan to have
any direct recruitment. The training program will start with CAD, FEA,
fatigue and damage tolerance analysis. Boeing and AirBus are looking

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frantically for airframe designers and looking at India. Boeing is
requesting TCS to place 250 engineers at site. There is a great demand
for people with knowledge of fatigue and damage tolerance of airframes.
My Division at NAL is the only place where some samebalance of this
knowledge is available. Our training program targets this requirement.
Our training center will be different than any other centre due to the
hands-on experience they will receive in actually working on airframes.
Initially they will solve problems related to HANSA-3 and SARAS, the
two aircraft on which we worked while at NAL. As soon as we start our 2-
seater and 4-seater aircraft design for our pilot training school, these
training students will do the CAD and FEA work on our own aircraft.
When we carry out the structural test they will be present to experience
how their FEA correlates with test response. For fatigue and damage
tolerance training I plan to install 2 to 3 fatigue testing machines to
impart hands-on training. The CAD-FEA training will be for 3-months
with a fee structure of Rs.20,000 per student. We will add F&DT training
and the duration extends to six-months with a fee structure of 40,000 per
student.

Our aim is to see that 10 out of the first batch of 30 students get into
TCS/INFOSYS/SATYAM/CADES or any other reputed company by
their own merit enhanced by our training. These 10-employees will be
my brand ambassadors for my training program. Tripathy and I have
worked out the details of the training program in such a way that it will
generate the recurring expenses within the first six-months. Gradually
Tripathy will include all the other fields for training that are required for
running our business.

The next aspect I have mentioned in my short-term plan is the ESO


services. Because of the “offset” policy of the government, there is a kitty
of $ 10 billion in the defense sector. The entire work is coming to HAL as
there is no private aircraft industry in the country. HAL-chairman has
already declared that he will outsource this entire package. Currently the
capability that exists with private players like TCS/SATYAM etc is in FEA
field. There is no design capability, no testing capability and no
manufacturing capability in the Indian aerospace private sector.
HAL also knows that aircraft design capability is available outside HAL
only with the retired HAL designers. A majority of them are now working
at NAL in NAL’s aircraft development projects. I plan to retain the entire
team as senior-level-consultants for my company. Fortunately the people
who worked under their supervision at HAL are now at the level to
decide the outsourcing packages. My strategy is to register as a
vendor at HAL and show them that the retired HAL designers are

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our consultants and more importantly show them that my company
has enough investment to set up a fabrication facility and a full
airframe test facility. With this I can take up any outsourcing work
from HAL out of the $ 10 billion offset market.

In any case within 10 to 15 days of a promise of investment in my


company, I can go to HAL with these retired designers and get a more
accurate picture of the extent of outsourcing jobs that we can get.

NAL has also decided to outsource as much work as possible in their


SARAS, HANSA-3 and the 4/5 seater aircraft development with
Mahindra and Mahindra. I can happily get the entire fatigue and damage
tolerance design, analysis and test validation work as I was in charge of
these activities before my retirement. NAL has to spend anywhere
between Rs 60 to 80 crores for the tool-design required for the limited
series production of SARAS aircraft. The chief tool designer of SARAS is
in our group. I can easily get the work from NAL. Our initial training
program also includes airframe tool design keeping the above possibility
in view.

The offset kitty for our civil aircraft already ordered is of the order of Rs
45000 crores. There are no takers for this in India in a significant way.
With my company’s capabilities in aircraft design, analysis, structural
testing and fabrication. We can be the most preferred vendor for this
outsourcing work.

With a suitable investment back-up I can follow my above mentioned


strategy to overtake TCS/CADES/SATYAM/INFOSYS and be the no.1
vendor to the Tier-I suppliers of Boeing and AirBus in less than 3 years.
The only thing Boeing and AirBus must not know is our intention to be a
full-fledged aircraft industry (in any case in the short and medium term)

What I need to succeed in my strategy for the ESO business


(especially from HAL and NAL) is a promise of money and not
actually spending it initially. I need to show that I already have the
required investment for airframe testing and sheet metal fabrication (I
repeat: don’t have to spend it). Only with this I can get a very accurate
picture of the revenue I can earn from HAL and NAL outsourcing work. If
and only if this makes business sense, we start spending the money to
set up the facilities.

My domain is testing and I have the best airframe fabricator with 3 to 4


decades of HAL experience with me to run this show. A full scale

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airframe fatigue testing costs about Rs 130 to 150 crores and takes
about 2-years to complete. I can complete this task in my test-facility in
less than Rs 20 crores (based on my experience at NAL) and I can
quote a price of Rs 65 to 75 crores to get such order from other aircraft
companies. With the information technology available they can monitor
and even control the test running in my facility. In-fact, in the recent past,
there have been many queries especially from Bombardier for fatigue
and damage tolerance test on major airframe components. NAL bid one
through SATYAM but lost to an UK company because of a higher
quotation.

In any case we need the fabrication and test facilities for our own aircraft
development plan. There is synergy in these two businesses (ESO and
aircraft development). Fabrication is labor intensive and we create these
job opportunities for people with ITI training and high School education.

With my strategy we can get sizable revenue from ESO before the
end of first year

Medium term plan:

I have indicated four business verticals. There is synergy between the


pilot training and aircraft design center. We start the flying activity with a
few bought out Cessna-172, 4-seater aircraft. With the retired HAL
designers on board and all other aspects of aircraft building taken care
by persons coming out of SARAS project, I can get DGCA approval for
the aircraft design and engineering service for our company. We launch
our program of developing 2-seater and 4-seater aircraft. My strategy is
to identify the 2-seater aircraft which is sold the maximum number of
units per year. Take all its performance parameters. Set the Parameters
for our design a notch higher than this. Make an announcement of our
intention to develop a 2-seater with the quantified specifications. At the
end of each stage of aircraft development (1. conceptual design, 2
preliminary design, 3. detail design, 4. analysis, 5. Ground testing and
flying) demonstrate that all the performance parameters are with + 1% of
our stated specifications. This will show to the world how good we are as
aircraft designers. Participate in the general aviation airshow at
OSHKOSH, USA, arrange for a pilot, who has years of experience in
flying the aircraft whose vital statistics we have taken as benchmark, to
fly our aircraft. Arrange a T V show where the pilot evaluates our aircraft
vis-à-vis the most popular one. Hopefully this will open the world
market for my aircraft with a good pricing strategy to capture

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market share. We come back, build a few more to be used in our flying
training school.

Because it is our developed aircraft, we can keep all the aircraft


operation ready everyday with one or two aircraft to spare ( a feature
which other flying schools in India are not able to do). Our maintenance
cost will be the minimum as our own fabricators and integrators will do
the job.

Our aircraft design and engineering centre will double as a training


center to have synergistic effect on our training program started in our
short term plan. These two activities from our short and medium terms
plans will lay the foundation for establishing the aircraft design and
development institute as stated in my long-term plan. There is also
synergy in the MRO and AME training plans. According to a recent
survey carried out by Aeronautical Society of India there is an urgent
need for six more addition MRO hangars for airframe to meet the airlines
requirements. The revenue per hangar per year is estimated to be
minimum 41 billion dollars (upto 2020). The cost of an MRO hangar is
around Rs. 40 crores as we have shown in our plan. I have one of the
best overhauling manager from HAL with us who will man this operation.
To carryout a ‘D’ check on a wide bodied aircraft a total of 200
technicians are required per hangar in one shift. If I run the hangar in 3-
shifts I will need 600 AMEs to man to operation. A huge employment
opportunity. There is a dearth of such talent in India. My AME institute
will meet this requirement. I will have no problem with manpower to run
my MRO-show. The AME students will get the hands on experience in
our own hangar- a chance which no other institute in India is able to
provide. The profit from MRO business will sustain the AME institute.

The director of MRO will also be the director of AME institute.

Eventually these facilities will be used for our own airline operation as
outlined in my long-term plan. I will minimize my life-cycle cost by doing
my own maintenance.

Long term plan:

Establish air-transportation operation using our own aircraft, flown by our


own trained pilots from our own flying schools, maintained at our own
MRO hangars by our own technicians from our own AME training
institutes. This is the big picture that I have.

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I have the man from Air India Express who will initiate this activity. It is of
course a very big budget plan

I will start with a market survey for India in the following:


1. Passenger and cargo transportation potential in Tier-II and Tier-III
cities
2. Aero tourism
3. Air-charter
4. Air-taxi
5. Air-ambulance

I consolidate the picture of the total number of aircraft required. Work out
a strategy to have maximum possible commonalities in these various
types of aircraft (the engine, the material used, the key structural
features, and equipments used, the fabrication methods etc). Then take
up the design and development work on these aircraft. Based on the
time required for aircraft development we can start the airline operation
with leased aircraft.

I strongly believe that I can develop this market for general aviation in
India. Capt. Gopinath’s dream died with Kingfisher swallowing the small
fish (Air-Deccan). I think I can build on his concept to make air-
transportation as common as mobile-use. In Russia air transportation is
cheaper than an overnight train journey.

Use of Diesel engine, making lighter airframes, developing and


operating your own air-fields, are some of the additional ideas to bring
down the cost of air travel.

I also see a great synergy in your port-development activities. By


working out the logistics operation (land, air and sea) we can make
this transportation idea to be win-win proposition to every stake
holder.

The airline business brings in tremendous synergy to my aircraft


development business. It makes it a closed loop operation.

Last but not the least is establishing the aircraft design and
development institute. It will be planned in such a way that the
students will pass through the design office, enter the fabrication
hangar come out at the entrance to the test hangar and then come

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out and walk through flying school airfield before they enter their
class room.

While they drink “rasam” and “sambar” everyday they will be inhaling the
aircraft everyday during their 4-year residence in our institute. In the 2nd
year they will actually design our aircraft under the guidance of design
engineers from our design office even though they won’t be
understanding the underlying principles. They will see their own
designed aircraft is being analysed, fabricated and tested before flying in
our flying school. They will spend the remaining two years in
understanding and appreciating their own aircraft design.

At the end of their 4-year term they should be able to claim that as a
team they can build any specified aircraft. My institute will not be
another aeronautical engineering department in a college. It will put its
own product in the world market.

Can any one think of a medical college without a hospital? How


then can one conceive an engineering institute without an active
participation in the related industry? It is the industry that should
drive the institute.

I have never been able to express my inner feelings in a short write up.
This write up is already long. We scientist working R&D institutions have
developed the habit of talking more and doing less. I am afraid, I suffer
from this too.

Let me conclude by stating the following:

I have a plan to build a 100 storey building. An investor has shown


interest and advised me to start in a small way on this project. The
minimum investment that I need is for the foundation for 100 storeys and
one storeys above the ground. What the outside world sees is the single
storey building. The 100 storey foundation is not visible. The point is
whether the investor is able to see the foundation?

My business perception has built-in synergy in my short, medium and


long term plans. With out a firm idea about the medium and long term
objectives the short term activities will be meaningless

The air-transportation business will require many thousands of crores of


investment. General aviation aircraft development requires a few
hundred of crores. One the other hand training and outsourcing can be

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initiated with an initial investment of 20 to 30 crores but with a clear
understanding of availability of investment for at least the medium term
plans

If you plan to hold our hands to go thru our medium and long range
plans, here are the detains of our short term plans:

We will establish the following:

1. Training and ESO center Rs 544 lacs


2. fabrication facility Rs 550 lacs
3. Testing facility Rs 2337 lacs
Total Rs 3431 lacs

Fabrication and test facility are required to get outsourcing work from
HAL and NAL to start with. The details of the organizational set up,
manpower and infrastructure are provided in Annexure-1

I sincerely hope you will have the patience to go through this write up in
your leisure time. It may not be possible for you to do this before your
meeting with Tripathy on 12th of this month. However, you will be able to
get the essence of this write up from Tripathy. I hope to spend some
useful time with you soon when you think it is appropriate

3. Market scenario:

We hope to compete successfully through:

a. Joint ventures and partnership with OEMs


b. Foreign third-party MRO Players.
c. Tie-up with Low Cost Carrier ( LCC ) in India ( Kingfisher, Air
Decan Etc.
d. XXXXX aviations unique selling points would be
a) Local presence ( In Indian Context )
b) 24* 7 effective services

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We hope to maintain a good reputation in the market for supplying
quality service and hope to get standing orders. Our service product
/demand will be in global market.
4. PROCUREMENT OF RAW MATERIALS & Consumables.
Plenty of related materials are available in domestics as well
as international markets. The company is planning sourcing
aircraft material from the following companies.

Delite Systems Engineering (India) Pvt. Ltd. Maharastra


Neha international. New Delhi
India Machine Tools. Bangalore

5. COST OF THE PROJECT:

Sl. PARTICULARS Amount in


No. Crors

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1. LAND 20.00
2. PLANT & MACHINERY 91.82
3. FACTORY BUILDING 31.58
4. OFFICE BILDING 21.92
5. FURNITURE & EQUIPMENT 9.68
6. CASH CREDIT 50.00
TOTAL 225.00

6. MEANS OF FINANCE:

Sl.No. PARTICULARS AMOUNT In


CRORS
1. OWN FUND 52.50
2. TERM LOAN 122.50
3. CASH CREDIT 50.00
TOTAL 225.00

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