Logistics

‘We are under pressure from airlines in India'

Ashwini Phadnis in Toulouse | Updated on May 29, 2011 Published on May 29, 2011

Dr Kiran Rao, Executive Vice-President, Sales & Marketing, Airbus Industrie   -  The Hindu

Airbus and Boeing cannot sit back and say that the Indian market is heating up so we are going to stop the planes from going now. We have to rely on the fact that airlines know what they are doing.KIRAN RAO, EXECUTIVE VICE-PRESIDENT, SALES AND MARKETING, AIRBUS INDUSTRIE



These are busy times for European aircraft manufacturer Airbus Industrie. Not only is it ramping up production of the single-aisle A-320 aircraft, it is also delivering A-380s and meeting airline officials to make more sales. The Executive Vice-President, Sales and Marketing, Dr Kiran Rao, spoke with Business Line at his second floor office in the company's headquarters in Toulouse on a variety of issues concerning the Indian market.

Excerpts from the interview:

From which category of airlines in India is demand coming?

I cannot name the airlines but I can tell you that we are under a lot of pressure from airlines in India. It is across the board. The low-cost carriers are pushing us for the A320s. The A-330 is in huge demand from Air India, Kingfisher and Jet.

Every single one of them wants us to find planes to help them.

What do you attribute this high demand to?

We went through a phase when we sold a lot of planes and delivered several of them. In 2005 we sold a whole lot of planes. Then in 2008 we got into a phase when airlines said ‘please, can you slow down'. End of 2010-11 the planes were coming out quicker again. So that is how the cycle has gone so far.

Are you not worried about unrealistic levels of fares impacting deliveries?

There are airlines that are making good profits within the current fare structure and there are obviously airlines that are hurting a bit. But that is the normal market.

Standing back in Toulouse and looking into India; yes, you cannot have an uncontrolled volume of aircraft going into India. But I think there is a natural break on this because the availability of planes is not there. If they do not buy from us, they do not lease from lessors.

Airbus and Boeing cannot sit back and say that the Indian market is heating up so we are going to stop the planes from going now. That is simply not our role. We have to rely on the fact that airlines know what they are doing.

What variety of aircraft is more in demand?

We are not being pushed for some variants of aircraft. The A-319 is too small for the Indian market.

The A-321 is becoming more popular. The A-330-200 was the flavour of the month when we started in 2005, now that flavour is shifting to A-330-300. The A-380 does not figure in discussions with any airline at the moment.

Do you see more leasing happening or more purchase from carriers in India?

Air India has put out tenders for leasing aircraft. We are working on deals for other airlines for purchases and leases too. We are working on a complete set of deals that should come to fruition.

Forty-three aircraft have been delivered to Air India but there is no sign of Maintenance Repair and Overhaul (MRO), which was part of the deal. Has the MRO plan been shelved?

No, it has not been given up. We made a lot of promises when we did the deal. The MRO was one of them. We promised a training centre and an engineering centre, both of which are up and running.

In early June we are going to make another announcement for another piece of offset. There is another big project coming out. It will be with new partners. We have also set up the spares centre.

We had promised $500-600 million as part of the deal and have already done work for more than $1 billion. We continue to work with Air India towards developing a joint business plan for an MRO in India.

But, in addition to that, as the Indian market is growing and with the skill-set that we have in India, there are a lot of private and overseas investors who want to work with us to create a complementary MRO business, together with what we are working on with Air India.

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Published on May 29, 2011
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