Hal To Be Sub-Contractor For Airbus

Hindustan Aeronautics Limited (HAL) will be a subcontractor in the Airbus A316\317 aircraft project, being developed jointly by Airbus Industrie, China National Aeronautics Corporation (CNAC) and Singapore Technologies. The consortium is building a low cost 100 seater jet to cater to the growing Asian market for medium sized aircraft.

Negotiation on the nature of subcontracting are on between HAL and Airbus, HAL sources said, adding that Indias share would be quite extensive in the project.

India had earlier been thrown out of a China-Singapore-Korea consortium formed to build a 100 seater plane called Asian Air Express. The CNAC broke off from a memorandum of understanding signed with HAL in 1993, and partnered Airbus to source technology. Korea too backed out as it felt the work share being offered to it was too little. In early 1997, China inked a deal with Airbus and Singapore to jointly develop planes smaller than what Airbus has.

 

HAL sources said several rounds of talks have been held and a picture has emerged on the kind of work HAL can do for new planes that are presently in the design phase.

The Indian Defence Aeronautics Company makes doors for Airbus A320 under a $50 million contract to deliver 600 door sets. It has delivered 50 sets in two years and Airbus is accelerating the delivery schedule to keep up with increased demand for A320 planes. The offtake will be increased to about 75 per year, Airbus sources said.

Airbus hopes to ploughback 30 per cent of the gross sales from its upcoming medium capacity long range (MCLR) deal with Air India (AI) into subcontracting work for HAL. The deal for 23 planes is expected to be in excess of $3 billion. HAL stands to gain approximately $1 billion in subcontracting work if AI purchases the MCLR. Boeing, the other bidder in the MCLR deal, has also offered similar terms.

HALs entry into the A316\317 project will expose it to the best in civil aircraft manufacture. The Airbus-China-Singapore consortium sees a demand for over 200 planes in the world market for the medium size jets that can serve both as feeder and long distance aircraft.

Airbus is hoping to transfer the advantage of low cost Asian manufacture to its final customers and price the A316\317 competitively. It is looking at the 100 seater planes as means to garner new markets in developing countries.