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European aerospace industry exploring tie-ups with India

Dinesh Varma

Discussions in progress with potential partners: Kraus

CHENNAI: The European aerospace industry is exploring a slew of partnerships with Indian industry in the areas of civil and military aircraft manufacturing, Martin Kraus, vice- president (Defence Electronics), EADS Defence and Security, the Munich-based holding company of Airbus said here on Friday.

A combination of tough competition, cost pressures and high oil prices in the civil aviation sector and shrinking Defence budgets in European nations and relaxation of export regulations could see a new ballgame emerging in aircraft development partnerships with India, Mr. Kaus told The Hindu on the sidelines of the “Connect 2008”.

“Our defence strategy is very much to build cooperation with India and facilitate manufacturing tie-ups with engineering companies here,” said Mr. Kraus.

Discussions were in progress on this front with potential partners in industry as well as top officials in Delhi, he said.

The agreements could essentially span specialised areas such as structural design such as airframes, sub-assembly of aircraft, software engineering and testing. The scope of collaboration could also involve development of early warning air-borne systems and multi-role combat aircraft.

“We are positive of firming up quite a few contracts this year,” Mr. Kraus said.

He pointed out that India, Europe and Germany in particular, had a long history of collaboration in development of military aircraft and helicopters.

Key market

India had the potential of emerging as a key market for the European aerospace industry which was on a cost reduction regime. Though outsourcing aerospace projects to India was hardly a recent phenomenon, Mr. Kraus pointed out that the traditional outsourcing model had undergone a critical change.

The blueprint-based production outsourcing has given way to a business model where outsourcing involved high-end functions and capabilities—such as structural engineering tasks and cockpit designing of the A-350—that required the partner to share part of the risk for contingencies such as a waning US dollar or cost escalation of mid-project design changes, he said.

“The industrial landscape in Europe is in a process of radical restructuring.” India had a lot to gain from striking aerospace partnerships for projects that demanded cost-cuts and reduced engineering time cycles, Mr. Kraus said.

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