Airbus, Indian airlines discuss replacing planes

European aircraft maker Airbus Group NV on Thursday said it is in talks with several Indian airlines for replacing their fleet of medium-haul A320s, some of whom are of early 1990s’ vintage.

“We are in discussion with the Indian domestic airlines for replacing a whole lot of A320s to the latest and more fuel-efficient A321 and A320neos” said Kiran Rao, Executive Vice-President for Strategy & Marketing, Airbus. He was addressing journalists at the Airbus Innovation Days event in Toulouse, the headquarters of the aircraft maker.

Airbus has a near monopoly of the market in India with a share of about 80 per cent. Airbus has in its forecast said India will need 1,290 aircraft worth about $190 billion between now and 2032.

There are about 145 A320s operating in India and one of the domestic airlines which might need upgrades to A321s or A320neos, both part of the A320 series, could be IndiGo.

Rao revealed that one of the new airlines is also in talks with Airbus for buying the later versions of the A320 family.

The Indian Commercial Pilots Association (ICPA), a pilots union of the state-run Air India, recently wrote a letter to the airline asking the regulator, DGCA, to ground the airline’s A320s, some of which are more than a quarter century old. The ICPA claimed that the older A320s carry a heavy risk of failure after reports about them developing snags came to light.

In another development, Airbus chief executive John Leahy expressed concern about the market for aircraft in India developing much slower than expected.

He, however, pointed out that the new government under Prime Minister Narendra Modi is moving in the right direction. “GDP and aviation are interlinked and aviation is at the heart of the GDP growth,” Leahy said. During the earlier decades, most orders came from the developed markets like the US and Europe, but during the last decade, more aircraft are being bought in the emerging economies. “This is clearly the decade of developing markets.”

By 2033, the aviation market in India will grow exponentially with at least one in four expected to travel by air per year, he said. At present, it is one in 20. The aircraft maker is also considering plans to increase the production of the A320 single-aisle family of jetliners by about 25 per cent to 60 a month. The booming middle class population will sustain increase in production of such aircraft which can also fly short-haul international routes, Leahy said. Airbus currently produces 42 medium-haul A320 series a month with a target to produce 50 a month by 2017. Rival Boeing produces a similar number of B737s, which is expected to go up to 52 a month by 2018.

Rao, who had earlier worked as chief executive of Airbus in the Indian subcontinent, said he expected most of the replacement for A320s to come through within the next five years.

He, however, said no airline in India has placed orders for buying the A380s, the largest aircraft in the world. The now defunct Kingfisher Airlines was the only domestic airline which had placed an order for A380 which now stands cancelled.

The writer is in Toulouse, France, at the invitation of Airbus

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