With an aim to speed up deliveries of crucial platforms to the armed forces, the government is looking to restructure the public sector giant Hindustan Aeronautics Limited (HAL). The aim is to improve the operational effectiveness.The restructuring initiative stems partly from the substantial backlog of orders, currently exceeding Rs 2.7 lakh crore. The pending orders include fighter aircraft, utility rotorcraft, combat helicopters and propulsion systems, with additional contracts anticipated within the year.Initial steps have started to develop a strategic plan, emphasising improvements to the existing framework, including potential establishment of standalone units specialising in various aspects of aircraft manufacturing, according to an ET report.
Officials indicated that a contracted external consultancy has begun evaluating HAL’s present operational model and organisational structure, conducting consultations with top executives. Under a previous reorganisation proposal for HAL, the plan contemplated establishing three autonomous divisions, each focusing on distinct areas of aviation manufacturing. According to insiders quoted in the report, the concept suggested creating separate units dedicated to fixed-wing aircraft production, helicopter manufacturing, and maintenance and repair operations. However, this restructuring initiative remained unimplemented due to insufficient orders at the time.Currently, HAL’s order backlog exceeds its yearly revenue by more than eight-fold, prompting worries about its ability to meet delivery schedules effectively. The organisation faces notable delays in delivering Light Combat Aircraft, causing apprehension within the air force, particularly given its diminishing combat capabilities.The substantial backlog has also hindered HAL’s involvement in the ambitious Advanced Multirole Combat Aircraft programme, which aims to create next-generation fighter jets.Last week, the Indian Air Force finalised a record-breaking Rs 66,500 crore agreement with HAL for 97 Tejas Mark-1A fighter aircraft, despite not having received any of the 83 ‘improved’ jets from the previous Rs 46,898 crore order placed in February 2021.HAL has said it will hand over the initial pair of 83 Tejas aircraft in October. The supply of 99 GE-F404 turbofan engines from the American company General Electric, for which HAL signed a contract worth Rs 5,375 crore in August 2021, is now showing signs of steadiness, according to an official.
