Airbus to Invest in New Partners

Indian companies, both public and private, are an integral part of Airbus Group’s global supply chain. Overall, Airbus procurement from India has tripled in the last three years and was over $350 million in 2013. Giving further details of how Airbus is going to further invest in India is Yves Guillaume, Airbus Group President in India.

By SP's Team

SP’s Aviation (SP’s): How are you planning to support the ‘Make in India’ initiative?

Yves Guillaume (Guillaume): We have a rich history in India and have proved ourselves to be a reliable partner. As the country continues to grow and the government seeks to catalyse the local aerospace and defence industry through the ‘Make in India’ initiative, Airbus Group stands ready to leverage its existing partnerships and invest in new ones to meet India’s expectations. Our proposal to build the C295 with Tata to replace the Avro and our JV with Larsen & Toubro for manufacturing radar, avionics, electronic warfare and mobile systems for military applications show our commitment.

Let me give you another example of how we have helped countries acquire skills in defence and aerospace. In Australia, where Airbus Helicopters won the contract for 22 attack helicopters, 18 of them were assembled locally by an Australian company, Airbus Group Australia Pacific (AGAP), that acquired enough technologies and programme management expertise to further assemble transport helicopters and upgrade military aircraft, including production of 43 out of the 47 NH90 acquired in another major order. AGAP is now one of the leading national aerospace and defence companies with about 1,300 employees.

SP’s: On the defence side, what do you looking forward to in 2015?

Guillaume: As you know, we have already been selected by India to supply six A330 MRTT air-to-air refuellers. I think both sides now really need to finalise the contract. We are also hoping that the Indian Government will progress the Avro replacement programme for which we have submitted a joint bid with Tata. We are offering the modern C295 medium military transport aircraft. Majority of the aircraft will be manufactured and assembled by Tata in India with significant benefits for the local supply chain.

On the helicopters side, there are a number of campaigns where we hope to make progress. The AS550 C3e Fennec is foreseen for Indian Army’s and Air Force’s reconnaissance and surveillance helicopter campaign. As you know the tender was cancelled for the third time and has been restarted under the ‘Buy & Make (Indian)’ category. Then there is the AS565 MBe Panther which fits the requirements of India’s naval utility helicopter programme which envisages acquisition of around 100 units. In addition, the EC725, fitted with the relevant weaponry and sensor suites, can perfectly meet the Indian Navy’s 120+ naval multi-role helicopter (NMRH) programme requirements.

SP’s: How significant do you hold the decision to increase foreign direct investment (FDI) in defence to 49 per cent?

Guillaume: The increase in the FDI cap in defence from 26 per cent to 49 per cent is a forward looking step. However, management control, and not the exact FDI threshold, is the key issue. It would be much easier for us to transfer cutting-edge technologies to a joint venture in India in which we have management control. Plus if we control the JV, we can be assured of the quality of the products manufactured and will be willing to market them globally through our extensive networks.

SP’s: Your bid with Tata for the Avro replacement has ended up in a single vendor situation. Now what?

Guillaume: We have submitted our proposal and now we are simply waiting for the Ministry of Defence to decide on how to proceed. We understand that, following the change of administration and Defence Minister, this may take a little longer than expected.

SP’s: How important are Indian suppliers for your global supply chain?

Guillaume: Indian companies, both public and private, are an integral part of Airbus Group’s global supply chain. We have over 30 local suppliers and more than 5,000 jobs have been generated by us across this supplier network. The top three commodities that we source from India are engineering and IT services, aerostructures and detail parts and systems. To give you some examples, HAL produces half of all A320 forward passenger doors while Dynamatic Technologies, a global tier-1 supplier, provides flap track beams for the A320 and A330 Family aircraft. Tata Advanced Materials Limited, in partnership with Sprit Aerostructures, is producing composite parts for the A350 XWB programmes. In addition, Aequs supplies several detail parts. Companies such as Infosys, Tech Mahindra, Tata, HCL, Geometrics and Wipro also provide information system and engineering services. Overall, our procurement from India has tripled in the last three years and was over $350 million in 2013.

SP’s: What are you showcasing at Aero India?

Guillaume: On display at our pavilion — OD8 — in front of Hall C, are scale models of the world’s most spacious passenger aircraft A380 and the fuel-efficient A320neo. Also on exhibition are models of the A330 MRTT mid-air refueller which has been selected by the Indian Air Force (IAF) and the C295 medium military transport aircraft which has been offered to India, in partnership with Tata, for the Avro replacement programme. Two ‘Made in India’ products — High Accuracy Air Pressure Measurement System and Structurally Integrated Antenna — are also part of the display line up.

On the helicopters’ side, a model of the EC725 is on exhibition. The EC725, fitted with the relevant weaponry and sensor suites, can perfectly meet the Indian Navy’s 120+ NMRH programme requirements and the Indian Army’s 150+ tactical transport helicopters’ fleet expansion plan. In addition, there are models of the AS550 C3e Fennec and the AS565 MBe Panther. The Fennec is foreseen for the Indian Army’s and Air Force’s reconnaissance and surveillance helicopter campaign whereas the AS565 MBe Panther fits the requirements of India’s naval utility helicopter programme. Model of the civil, single-engine EC130 T2 is also being showcased.