The Hindu Business Line : `India market will expand as skies open up more'

THE US-based helicopter major, Bell, which is in the race to sell 197 helicopters to the Indian Army, is clearly bullish about the prospects in both the civilian and Defence markets here. In a freewheeling interview at the company's office in Dallas Fort Worth, in the US, the Vice-President, Asia-Pacific Sales, Mr Max E. Wiley, outlined Bell's plans for India.

Excerpts from the interview:

The two major aircraft manufacturers Boeing and Airbus recently upped their forecast for demand of jets from India. Do you share their optimism? What, according to Bell, is the demand in the short, medium and long term for helicopters?

We have seen a sharp take-off for demand of helicopters and this trend should be sustained as more people discover how helicopters can enhance their mobility, increasing their efficiency in getting things done.

From which segment of the Indian market do you see maximum demand?

We have seen tremendous growth in demand from the corporate and offshore markets.

At present, how much does India contribute to the global sales of Bell? Where do you see this headed?

In the last two years, we have taken orders for close to 20 helicopters a year from the commercial market. The India market will continue to expand as the skies continue to open up.

The latest Export-Import policy of the Government has eased rules for import of helicopters. What impetus will this give to helicopter sales in India?

As long as the economy is booming, and metal and oil prices are at a record high, there will be more buyers for helicopters. However, we have seen several import permits being held up because the Airports Authority of India (AAI) comments that there is insufficient parking space in the major airports for additional helicopters.

In the past, Bell Textron had offered to make India the global hub for producing the Bell 407. What kind of economies of scale will the company look at to set up such a facility?

The demand in India alone for the commercial and military market justifies a second production line for the 407. If selected for the Indian Army Reconnaissance and Observation Helicopter Programme, the Indian Army will want 137 Bell 407s to be produced at Hindustan Aeronautics Limited (HAL); and there is a good possibility of more orders from the other Defence services.

What quantum of investment would this involve? Would such a facility be created as part of the counter-guarantee agreements that are necessitated with every Government contract?

Our requirement of outsourcing from India may even exceed the minimum offset requirement laid down by the Indian government.

We are looking forward to building long-term relationships with HAL should we be selected in the Indian Army programme.

India is considered strong in research and development facilities. Does Bell have any plans to outsource or move more such work to India? What kind of investment and job creations will this lead to?

Research and Development already form part of our plan for outsourcing. At present we have entered into an agreement with an R&D organisation for research in crashworthiness of helicopters. Our senior R&D executives will be visiting India this month to assess the R&D capabilities available. We will continue to seek more of India's technical resources.

Bell planned to enter into an agreement with HAL to manufacture tail rotor blades and other flight-critical components for the Bell 206 model. What is the status of the project and will the partnership be extended to other development projects also?

HAL has set up the production facility for the 206 tail rotor blades. The first product is expected to go into quality testing shortly and, once the go-ahead is given, regular production will start. There are over 6,000 Bell 206s flying all over the world, and there is a huge requirement of tail rotor blades to support this fleet. HAL is set to become a major supplier of 206 t/r blades to Bell for the world market.

Does the company feel that having a fractional ownership model in India would see a jump in sales?

Fractional ownership of aircraft/helicopters is already in practice in India. However, the model in India is different from the successful model in the US, where owning a fraction of an aircraft simply entitles the owner to a certain number of hours of usage of any aircraft in a pool.

In India, a few business associates would get together and jointly purchase an aircraft/helicopter, and the cost of operations would be shared amongst them, based on usage. This model does not allow the flexibility and fast growth that this segment can offer.