Airbus Aims to Double Sourcing Value from India to $1.5 Billion

In a strategic move to capitalize on the rapid expansion of the Indian aviation market, Airbus is set to double its sourcing value from India, reaching $1.5 billion in the coming years. This initiative reflects the European planemaker's commitment to harnessing the potential of the world's fastest-growing aviation market, driven by a surge in aircraft deliveries to major Indian carriers such as IndiGo, Air India, and the upcoming Akasa Airlines.

Current Sourcing Landscape

Airbus presently engages with more than 40 suppliers in India, including prominent entities like Tata Advanced Systems and Mahindra Aerospace. These suppliers play a pivotal role in providing components and services for Airbus' commercial and defense aircraft, as well as helicopter platforms. The current sourcing value stands at $750 million, and the planemaker aims to double this figure to $1.5 billion in the near future.

Wings India Event Insights & India's Aviation Boom

Remi Maillard, President of Airbus India and South Asia, announced the ambitious growth plan during the "Wings India" event held in Hyderabad. Maillard emphasized that the global aviation industry is increasingly focusing on India, and the nation's aviation supply chain is undergoing a transformative phase.

India has positioned itself as the world's fastest-growing aviation market, with the fleet size of its airlines expected to surpass 2,000 by 2030, a significant leap from the current 700. The Indian government is actively supporting this growth by investing approximately $12 billion in the construction of new airports and the refurbishment of existing ones.

Key Suppliers and Growth in Capacities

The growth of Airbus' sourcing value in India is supported by key suppliers, such as Tata Advanced Systems and Mahindra Aerospace, both contributing to the development of a robust aviation supply chain. Civil Aviation Minister Jyotiraditya Scindia highlighted the substantial progress made by domestic manufacturers, noting that aerospace manufacturing has taken strong roots in the country.

India's Role in Global Aerospace Manufacturing

Minister Scindia proudly declared that every Airbus and Boeing aircraft produced internationally carries a part made in India. The nation's aerospace capabilities have expanded significantly, keeping pace with global demands. However, he also expressed the need for Airbus and Boeing to consider establishing final assembly lines for planes in India, aligning with the country's aspirations for a more prominent role in aircraft production.

Challenges and Opportunities

While assembly represents a relatively small percentage (5% to 7%) of a plane's overall value, the political significance attached to it cannot be overlooked. Despite India's lobbying efforts for jet assembly, Airbus and Boeing have primarily focused on increasing sourcing and procurement from the country. The recent surge in plane orders, including a record-breaking order by IndiGo for 500 Airbus planes and a substantial order by Air India, underscores the immense opportunities for growth in India's aviation sector.

Conclusion

Airbus' ambitious plan to double its sourcing value from India to $1.5 billion reflects a strategic alignment with the booming Indian aviation market. As the nation continues to invest in infrastructure and experiences unprecedented growth in its airline fleet, Airbus recognizes the potential for a mutually beneficial partnership with Indian suppliers. The call for establishing final assembly lines further emphasizes India's evolving role in the global aerospace manufacturing landscape.

With Inputs from Reuters

SpiceJet will launch flights from 8 cities to Ayodhya, the airline said on Friday.

In addition to the previously announced non-stop flights from Chennai, Bengaluru, and Mumbai, SpiceJet will extend its services to include routes from Delhi, Ahmedabad, Jaipur, Patna, and Darbhanga starting February 1.

"This strategic expansion is aligned with SpiceJet's commitment to offering seamless travel options to passengers while contributing to the growth of regional connectivity," the airline said in a statement.

Last week, SpiceJet announced a special flight from Delhi to Ayodhya on January 21, 2024, catering to passengers attending the auspicious 'Pran Pratishtha' ceremony at the Shri Ram Temple on January 22.

Kempegowda International Airport Bengaluru (BLR Airport) has soared to new heights, clinching the prestigious 'Best Airport of the Year' title at the Wings India Awards 2024 held in Hyderabad on January 18. The airport also bagged the '>25 MPPA Traffic Award,' solidifying its position as a leader in the aviation industry. This accolade is a testament to BLR Airport's unwavering commitment to operational excellence, seamless passenger experience, environmental stewardship, and cutting-edge technology.

Operational Excellence and Passenger Experience

Over the past year, BLR Airport has significantly increased its passenger capacity, addressing the growing demand for air travel. The airport's dedication to a stress-free passenger experience is evident through the expansion of entry gates, check-in counters, and informative display boards. Terminal 2 (T2), spanning an impressive 255,661 square meters, has been designated for international operations, equipped to handle 25 million passengers annually. Expanded immigration and emigration counters contribute to reduced wait times, enhancing the overall journey for travelers.

Environmental Stewardship

BLR Airport takes its environmental responsibility seriously, holding a Level 4+ Transition status under the Airport Carbon Accreditation (ACA) program. The airport has achieved net energy-neutral status, banned single-use plastics at food and beverage outlets, and actively engages in extensive landscaping and afforestation drives. Remarkably, BLR Airport is water-positive, regenerating more water than it consumes. The commitment to sustainability extends to the use of 100% renewable energy across its entire campus.

Sustainable Design of Terminal 2

Terminal 2 stands as a testament to BLR Airport's commitment to sustainable design, being pre-certified with a Platinum LEED rating by the US Green Building Council (USGBC) and the Indian Green Building Council (IGBC) Green New Building Platinum certification. It is the largest terminal globally to achieve these distinctions. The design seamlessly blends modern technology with India's rich culture and heritage, featuring over 60 artworks depicting the 'Naurasas' or nine emotions. The 'Terminal in a Garden' concept provides a unique experience, allowing passengers to traverse amidst greenery in the bustling airport environment.

Innovation and Technology

Innovation and technology are key drivers at BLR Airport, ensuring a smooth and efficient passenger experience. The adoption of cutting-edge solutions like Digi Yatra facial recognition for contactless boarding, the BLR Pulse app providing real-time updates, and self-baggage drop systems for faster check-in showcase the airport's commitment to passenger convenience. The Automated Tray Retrieval System (ATRS) further streamlines baggage screening, contributing to overall operational efficiency. Notably, in October 2023, BLR Airport secured the top position as the world's most punctual airport for three consecutive months, highlighting its dedication to operational excellence and on-time departures.

Conclusion

The recognition of BLR Airport as the Best Airport in India at the Wings India Awards 2024 is a culmination of its relentless focus on customer experience and substantial investments in capacity. As BLR Airport continues to ascend to new heights, it aims to serve as the new Gateway to South and Central India, setting a benchmark for excellence in the aviation industry.

Boeing, a leading aerospace company, predicts that the South Asia region is poised to become the fastest-growing commercial aviation market, experiencing over 8% annual traffic growth over the next 20 years. The key driver of this remarkable growth is the rapidly expanding middle class in India, supported by a robust economy. In response to the soaring passenger and cargo demand, South Asian carriers are expected to quadruple the size of their fleets, requiring more than 2,700 new airplanes to address growth and fleet replacement.

Demand Drivers

The surge in demand is primarily attributed to the stimulating effect of Indian low-cost carriers, which hold an impressive 90% share of all domestic seats in the region. This dominance reflects the region's swift recovery from the pandemic and the resurgence of economic activity, with current traffic and capacity surpassing pre-pandemic levels. Long-haul traffic to and from India and South Asia also stands out globally, with nonstop services to North America, Europe, East Asia, and Oceania continually expanding.

Market Projections

Boeing's Commercial Market Outlook (CMO) for South Asia outlines a compelling growth trajectory. Over the next two decades, the region is expected to quadruple its fleet to meet escalating passenger demand. The projections suggest a demand for 37,000 pilots and 38,000 maintenance technicians, primarily driven by the burgeoning aviation needs in India.

Aircraft Breakdown

The South Asia CMO provides a detailed breakdown of the anticipated 2,705 new airplane deliveries through 2042. A staggering 72% of these deliveries will support fleet growth, while the remaining 28% will involve the replacement of older jets with more fuel-efficient models. Single-aisle airplanes are poised to dominate, constituting over 85% of the new airplane deliveries.

Economic Impact

The surge in demand for new airplanes is not only a testament to the region's economic growth but also indicative of the confidence in the commercial aviation market. Record orders for new and more fuel-efficient airplanes in India underscore the industry's positive outlook.

Conclusion

Boeing's optimistic forecast for the South Asian aviation market paints a picture of unprecedented growth. As carriers in the region embark on a fleet expansion journey to meet rising demand, the aviation industry is set to play a pivotal role in the economic development of South Asia. The region's ability to exceed pre-pandemic levels and lead in long-haul traffic underscores its resilience and potential as a key player in the global aviation landscape.

Airbus has signed an HCare Initial contract, a comprehensive by-the-hour services contract with Heligo Charter Private Limited for six Airbus H145 helicopters deployed for offshore and onshore operations in India.

Under this five-year contract, Heligo will benefit from Airbus’ HCare Initial program, which will allow the operator to replace scheduled and unscheduled components within 24 hours and pay a fixed rate per hour of helicopter flown. This will help Heligo reduce its maintenance costs and the need to keep a regular inventory, thereby providing enhanced fleet availability for streamlined operations.

“We are proud to be the first operator to offer a fleet of Airbus Helicopters' 5-bladed H145 to ONGC for offshore operations in India. Once these helicopters are delivered this year, Heligo will have the largest H145 fleet in India, serving both offshore and onshore missions. The H145 is a modern, multi-role helicopter that is suited for Indian conditions, offering exceptional performance and operational economics, said Nayan Jagjivan, Chairman of Heligo Charters Private Limited.

“We congratulate the Heligo team for being awarded the recent offshore contract with the H145s. This HCare Initial by-the-hour contract that we have just signed with Heligo for their H145 fleet will ensure efficient operations and maximum availability for these helicopters. At Airbus, we believe in providing our customers with the best combination of support and services, and we are proud of our long association with Heligo. This is Airbus Helicopters’ largest By-the-Hour contract with an Indian operator,” said Sunny Guglani, Head of Airbus Helicopters, Airbus India and South Asia.

The H145 is the latest member of the company’s twin-engine rotorcraft product range – with designed-in mission capability and flexibility, especially in high and hot operating conditions. Compact in size, this helicopter’s small footprint and large, flexible cabin enable maneuvering in complex environments, such as oil and gas helidecks.

HCare is Airbus Helicopters’ comprehensive services offer, providing superior customer service support in five domains: Material Management; Helicopter Maintenance, Repair and Overhaul (MRO) and upgrades; Technical Support; Training & Flight Operations and Connected Services. With this contract, Heligo’s entire fleet of Airbus helicopters will benefit from the HCare Initial By-the-Hour program.

Rakesh Jhunjhunwala-backed Akasa Air has announced a "strategic collaboration" with Noida International Airport, which will base its aircraft at the upcoming airport.

The airline plans to launch "to operate domestic and international flights from Noida International Airport, to support the growing air travel demand in the region," it said in a statement on Friday.

“We are excited to welcome Akasa Air as our airline partner, marking a significant step forward as we progress towards airport opening. This partnership highlights our commitment to strengthen air connectivity in the Delhi NCR region and Western Uttar Pradesh.  Akasa Air is one of the fastest-growing airlines in the country, and we are thrilled to have them join us on our mission to establish a comprehensive air network, connecting major metros and Tier 2 and 3 cities across the country. Our goal remains to offer passengers unmatched connectivity and an exceptional travel experience," Christoph Schnellmann, Chief Executive Officer of Noida International Airport, said.

"Noida International Airport exemplifies our government’s focus on developing aviation infrastructure as the country becomes an international aviation hub. Akasa Air’s proposed partnership with the airport aligns with our endeavor to build a holistic network that connects the length and breadth of the nation. We are confident that the synergy will enable us to fortify further connectivity to and from the state of Uttar Pradesh and offer a seamless travel experience to passengers across the country. We look forward to the much-awaited launch of the airport and working towards our collaborative goal of making air travel accessible for a greater number of Indians,” Vinay Dube, Founder and CEO of Akasa Air, said.

The first phase of the Noida International Airport, with one runway and one terminal, will have the capacity to handle traffic of 12 million passengers annually. After completing the fourth phase, the airport can manage 70 million passengers per year.

IndiGo had already announced a similar agreement with the airport in November last year.