Airbus Optimistic About Indian Air Force’s Transport Plane Order

Airbus is optimistic to make its debut in the Indian defence market as India looks to replace Air Force's transport planes.

The European aerospace corporation has been selling commercial planes but isn't present in defence. It has now bid along with the Tata Group to replace the ageing Avro Hawker Siddeley HS748 fleet. The Air Force is looking for 50 aircraft and Airbus' C295 is said to be the frontrunner, according to media reports.

“We have concluded commercial negotiations and are in the process of completing it,” Anand Stanley, managing director and president at Airbus India and South Asia, told BloombergQuint ahead of the Aero Show in Bengaluru. “That will be the sole factory that we will construct in India and manufacture here.”

Avro is being built in India since the 1960s by Hindustan Aeronautics Ltd. And the state-run company has also joined the fray by offering to upgrade the Avro, the Economic Times had reported.

Its replacement will create 2,500 jobs and over 8,500 skilled jobs once Airbus gets the order, Stanley said. The factory will create tier 1, 2 and 3 supply-chain network as at least 40 percent of the aerostructure parts have to be sourced from India, he said.

Airbus is also partnering the Mahindra Group for the helicopter order to replace Navy's Chetak helicopters. The Navy is looking to acquire 111 utility helicopters. Airbus and Bell are said to be the frontrunners for the order, according to media reports.

“We have just received the expression of interest for the programme,” said Stanley. “We are very optimistic. This will be a competitive bidding process and there are other competitors. If we bag, again we will be manufacturing helicopters in India and this will have a multi-tier impact on the ecosystem.”

It, however, faces resistance from HAL that has asked the government to consider its light utility helicopters which the state-run unit is developing.

Stanley, however, said the two orders will have a huge impact on the entire aerospace ecosystem in India across suppliers. Airbus globally sources close to $50 billion worth of material from various vendors.

“We sourced closed to $1 billion in the last two years (since the last Aero India show) from India,” said Stanley, adding that this is expected to grow. Airbus engages with over 250 small, medium and large Indian vendors for its global supply chain.

Watch the interview here