Airbus offers BPO carrot

European aircraft manufacturer Airbus SAS has offered to give business worth almost $630 million to Indian firms if the company bags the $2.1-billion order to supply 43 aircraft to Indian Airlines.

Kiran Rao, vice president, sales (India and Africa), Airbus, said the company had already given a commitment to the Indian Airlines board that it would outsource to Indian firms business worth 30 per cent of the total contract value over a period of 7-10 years.

In an unrelated deal, Airbus has already signed a $50 million outsourcing contract with Hindustan Aeronautics Ltd for passenger doors and nose undercarriage for the Airbus A320 aircraft.

The other domestic companies providing services to Airbus are Infosys Technologies, HCL and the Pune-based subsidiary of Computervision.

Boeing, the other contender for the IA contract, had, in December last year, offered a price discount of Rs 700 crore on its original bid amount.

Dinesh A Keskar, Boeing's senior vice-president, said the company offered the discount after the conclusion of the bidding process in view of the substantial "price revisions" in the aviation industry during the last couple of years.

The bids were invited by Indian Airlines in December 2001, and the contract was awarded to Airbus way back in March 2002.

The Indian Airlines board had approved a proposal to buy a mix of 43 Airbus A319, A320 and A321 planes as part of a fleet renewal programme in March 2002.

The huge delays in approving the deal have forced the airline to take planes on lease to defend its declining market share.

Moving closer

• Airbus makes fresh pitch for the $2.1-billion order to supply 43 aircraft to Indian Airlines
• Company has signed a $50-mn outsourcing contract with Hindustan Aeronautics Ltd
• Infosys, HCL and Computervision are providing services to Airbus