As Boeing grapples with supply chain challenges, Airbus is capitalising on India’s robust aviation market. Airbus CEO Guillaume Faury recently announced that the company plans to significantly increase its annual sourcing of components and services from India to USD 2 billion by 2030, up from the current USD 1.4 billion. Highlighting India’s strengths in engineering and manufacturing, Faury emphasised that India should focus on its unique capabilities rather than mimic other global strategies.
India is one of the fastest-growing civil aviation markets globally. With over 700 Airbus planes currently in operation and an order book exceeding 1,300 aircraft for Indian carriers, the market presents a massive growth opportunity. Notably, IndiGo has placed orders for more than 900 planes, including wide-body A350s. Additionally, Air India has firm orders for 50 A350s.
Expanding supply chain in India
Airbus’s sourcing from India encompasses a wide range of components, including airframes, sub-systems, and highly loaded parts. Faury acknowledged the competitiveness and engineering prowess of Indian firms such as Dynamatic Technologies, Tata Group, and Mahindra. Dynamatic Technologies, for example, was awarded a contract to manufacture A220 Family aircraft doors.
“We are growing the supply base, we are procuring USD 1.2 to 1.3 billion (worth of components and services) from India today and we will be at around USD 2 billion before 2030,” the Airbus CEO said.
Airbus has also formed significant joint ventures in India with over 3,600 employees across its various sites and supports more than 15,000 jobs through its supply chain. The Final Assembly Line (FAL) for C295 military transport aircraft is a collaborative effort with Tata Group. Additionally, plans are underway to establish a FAL for the H125 helicopter. However, Faury indicated that a FAL for civilian aircraft in India might only be feasible for the next generation of airplanes.
“I see a lot of competitiveness and growth of business is on highly sophisticated systems which can be both re-engineered and optimised by engineering in India and manufactured in India. That is what we are doing with Dynamatic, Tatas and Mahindra,” he said. Last year, Airbus awarded the contract to manufacture and assemble its A220 Family aircraft doors to Bengaluru-based Dynamatic Technologies.
“For the current generation of aeroplanes, it doesn’t make sense for Airbus, it doesn’t make sense for India as well. India should play on its strengths and not try to replicate what others have been doing in the past. India is really a fantastic asset in engineering, IT, systems and software, I think that is where India has a win-win from both sides,” the Airbus CEO said.
While Airbus is optimistic about India’s growth trajectory, Faury acknowledged challenges related to expertise, human resources, and maintaining sustainable growth. The rapid development of infrastructure, including new airports, is a testament to the country’s booming aviation industry.
“Our challenge at Airbus is to support the speed of growth of the aviation industry in India,” Faury noted. With the supply chain situation improving, Airbus is well-positioned to leverage India’s strengths for long-term growth.
(With PTI inputs)