Airbus Considers Establishing ATR Final Assembly Line in India Following Embraer’s Regional Initiative
Airbus has expressed its willingness to establish a final assembly line (FAL) for its ATR regional aircraft in India, marking a significant development in the country’s aviation sector. This initiative aligns with the Indian government’s efforts to enhance air connectivity to smaller towns and cities. Currently, Airbus operates two FALs in India in collaboration with Tata Advanced Systems Limited, focusing on military and commercial aircraft. The company is now exploring the feasibility of expanding its operations to include ATR aircraft, which are already in use by several Indian airlines.
Airbus’s Interest in Indian Assembly Line
Airbus, a leading player in the aerospace industry, is considering the establishment of a final assembly line for its ATR regional aircraft in India. This move comes as the Indian government intensifies its push for improved air connectivity to smaller towns and cities. The company is currently in discussions with various stakeholders to assess the viability of this project. Presently, Airbus operates two assembly lines in India, one for the C295 military transport aircraft and another for the H125 commercial helicopter, both in partnership with Tata Advanced Systems Limited.
The ATR aircraft, which can accommodate up to 78 passengers, is jointly owned by Airbus and Leonardo. It has gained traction in India, with IndiGo operating a fleet of 50 ATR turboprops and the regional carrier FLY91 planning to double its fleet this year. Airbus already has a robust supply chain in India, with local companies contributing to the production of components for its aircraft.
Government Support and Regional Connectivity Scheme
The Indian government has recently approved a modified regional connectivity scheme (RCS) with a budget of ₹28,840 crore, aimed at developing 100 airstrips into operational airports. This initiative is designed to provide subsidies to airlines operating on RCS routes, thereby enhancing regional air travel. Airbus is optimistic that the growth in international travel and regional connectivity will significantly boost air travel in India, following a surge in domestic flights.
As part of its evaluation for the proposed ATR FAL, Airbus is focusing on two critical factors: the operating costs for airlines and the acquisition costs for customers. High operating costs in India, particularly related to jet fuel pricing and airport charges, pose challenges for airlines. Airbus aims to address these issues to ensure the long-term viability of airlines once the RCS funding concludes. Additionally, the company is exploring ways to increase the indigenization of components in India to lower acquisition costs for airlines.
Challenges in Pilot Training and Market Dynamics
Another challenge facing the regional aviation market in India is the high cost of pilot training for smaller aircraft like the ATR and Embraer, compared to larger models such as the Boeing 737 and Airbus A320. This discrepancy in training costs is a significant barrier to the growth of regional aircraft usage in the country. Addressing this issue is crucial for expanding the market for regional planes in India.
In a related development, Brazilian aerospace company Embraer has announced plans to establish a final assembly line in India in partnership with the Adani Group, contingent on securing a firm order for 200 aircraft. This competitive landscape highlights the growing interest of major aerospace manufacturers in the Indian market.
Future Prospects for Airbus in India
Airbus’s president for India and South Asia, Juergen Westermeier, recently met with Union Aviation Minister Ram Mohan Naidu to discuss the potential for the ATR final assembly line in India. The minister emphasized the importance of strengthening local manufacturing and increasing component procurement from Indian suppliers, in line with Prime Minister Modi’s “Make in India” initiative.
Sources indicate that Airbus may announce the establishment of the ATR FAL in the coming days, provided the ongoing consultations yield favorable results. Notably, Airbus previously set up the H125 assembly line in India without any prior orders for the helicopter, suggesting a commitment to local production regardless of immediate demand. The establishment of a local assembly line for ATR aircraft could significantly reduce acquisition costs for operators, especially as the government plans to introduce fiscal incentives to support regional aviation.
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