As part of its consolidation plans for India, Toulouse-headquartered Airbus is integrating its activities in the country into a fully-owned subsidiary, Airbus India, to provide a single point of interaction for customers, suppliers and stakeholders. Airbus India will be the fifth subsidiary of the Airbus group outside of Europe.
Talking to FE, Srinivasan Dwarakanath, who has been appointed Airbus India CEO, said the organisation will have customer-facing centres in Delhi and Mumbai. Building on the success of the Airbus Engineering Centre India (AECI) in Bangalore, Airbus India will also include strategy, customer services and procurement teams under one organisation. He said a maintenance, repair and overhaul (MRO) capability will be established at a later date. Bullish on its growth in India, the company, a global leader in aerospace, defence and related services, will also be increasing its sourcing activities from India. It has increased its sourcing of products and services from $25 million in 2006 to $300 million in 2013.
?Partnership is the binding ingredient for success, and the establishment of Airbus India underpins our strategy to foster even closer ties,? he said.
Building on our significant engineering presence in India, the new company structure will add a strong customer-facing element making us more agile, and bringing us closer to the stakeholders, suppliers and new talent, he added.
When asked about the timing of this consolidation drive (in the light of aviation industry passing through a turbulent phase), he said India has the highest growth potential in the aviation industry and abundant engineering talent, all of which make it a strategically important market. ?Airbus has been extending its industrial cooperation partnerships with India since the early 1970s and, today, Indian engineering and manufacturing companies nationwide, representing more than 5,000 people, contribute to Airbus aircraft programmes,? he said.
Incidentally, Dwarakanath was responsible for setting up Airbus? industrial footprint in the region, including the Airbus Engineering Centre India (AECI) and Airbus Training India (ATI), both located in Bangalore. Today, there are some 30 Indian suppliers working on Airbus programmes and manufacturing parts for every aircraft model.
Currently, Indian carriers have over 170 Airbus aircraft. Airbus? current market share in India represents over 60% of the country?s total aircraft backlog. In addition, since 2005, Airbus has enjoyed over 60% market share in terms of new orders. Airbus India Engineering in Bangalore employs 350 local engineers working in design and innovation, and the number of people working directly or indirectly on Airbus programmes has reached about 5,000. The cumulative turnover of Airbus-generated work in India has tripled over the last three years. It was over euro 250 million in 2013 and is expected to grow significantly in the next 10 years.
Statistics say an annual increase of more than 8% for 10 years is predicted for the aviation industry. The growth will primarily be driven by a huge and expanding middle class, coupled with renewed economic confidence. Yet the sector has some way to go before it reaches the levels seen in mature aviation markets such as the US, Australia and Europe. Even so, by 2032, Airbus estimates that Indian carriers will need 1,200-odd new aircraft to meet passenger and freight demand.