Thursday, August 31, 2006

Boeing, Airbus plan to invest heavily in India

NEW DELHI - Boeing Co. and Airbus plan to invest heavily in India to build maintenance centers and training facilities as the aircraft makers compete for a larger share in one of the world's fastest growing markets for commercial jets.

The European Aeronautic Defense & Space Co., the Franco-German company that controls Airbus, said Tuesday that it will invest as much as $2.6 billion in India over the next 15 years.

The investments will include setting a technology center and an Airbus engineering unit, EADS Chief Executive Tom Enders said in a statement.Separately, Boeing Co. signed an agreement with the western Indian state of Maharashtra Tuesday to set up a maintenance, repair and overhaul facility with $100 million in investment. The U.S. aircraft maker will invest a further $85 million to install four aircraft simulators and provide training support.

The Boeing announcement came a day after the company dramatically boosted its forecast for the Indian market, saying the country will buy 856 new jets worth $72 billion over the next 20 years to keep pace with the boom in air travel.

The investments by the aircraft makers, analysts said, are aimed at tapping the fast-expanding aerospace and defense markets in India and its vast pool of low-cost engineering and software skills, analysts said."If you look at the Indian aviation market now and the potential it holds in the next 20 years, the companies have to make these kinds of investments," said Kapil Kaul at the Center for Asia Pacific Aviation, a regional consulting firm.

"India is a priority country for EADS as it offers market potential and solid aerospace and defense competencies," Enders said in the statement. "We will facilitate the creation in India of training centers for pilots and mechanics, maintenance and spare-part distribution centers."

Enders, who was in India as part a German government delegation, said EADS hopes to bring the proposed technology center into operation by the second quarter of 2007, employing as many as 2,000 workers.

The engineering unit of Airbus will focus on high-end engineering analysis and design and will eventually work with several Indian aeronautic suppliers. It is expected to start rolling next year.

In addition, EADS would set up a sourcing office in India, with branches in New Delhi and Bangalore, by end of this year.


Anonymous said...

This announcement is favourable to which companies, experts please share ur view .... I feel Jet Airways should be kept in portfolio for the long term...

Anonymous said...

What is the advantages for indian company

Icarus said...

This announcement is most favourable to the consumer. This willl ensure that we have the state of the art maintenance which the western world has. What this also means is that a dozen more star ups will venture into aerospace in the coming decade and we will see more consolidation, more mergers and acquisitions in this space leaving this market withsomething like 7 national players and a few regional players pe region. Gradually we will also see the specialization of carriers who specialize in certain routes and leave the national players to play their bigger games. You might see things like two to three operators consistenly operting between Bangalore and mumbai with no intention of concentrating between other sectors. Let's see. My view is tokeep 5% of one's portfolio in investmentstock and divide the two equally as of today between JET and DECCAN AVIATION.

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