Toulouse/France: Airbus has dismissed the option of establishing a final assembly line (FAL) in India for its present fleet of planes, yet it still considers the notion for future models positively. As the leading aerospace enterprise in Europe, Airbus holds approximately seventy-five percent of India’s commercial air travel sector.
Establishing an Final Assembly Line (FAL) for commercial airplanes in India for Airbus could result in having the complete supply chain within the country—from seats and engines to the fuselage and wings—thus enhancing local production and generating additional employment opportunities. Currently, Airbus operates FALs in India specifically for military aircraft like the C295 planes used by the Indian Air Force in Vadodara, as well as for H125 helicopters; however, this does not include facilities dedicated to assembling commercial jets.
India’s aviation industry is experiencing rapid growth and is anticipated to require around 2,000 additional airplanes over the coming years. In line with this, the Indian government has shown strong interest in encouraging Airbus to establish a Final Assembly Line (FAL) for commercial jets as part of their 'Make in India' initiative.
"The focus at the final assembly line is on the upcoming generation of airplanes. Regarding the present generation, I believe it wouldn't be sensible for both our company and India. It’s important to leverage your own strengths rather than attempting to mimic what was done previously by others. India has remarkable capabilities in areas such as engineering, information technology, systems, and software," stated Airbus CEO Guillaume Faury during an interview with a cluster of Indian reporters in Toulouse, France, on Tuesday.
He cited two reasons for his company’s reluctance to establish an FAL for commercial aircraft. First, Airbus is “already oversized” in its production capacity, with 10 FALs around the world—two in the US, two in Toulouse, two in China and four in Hamburg.
"It's far more intricate and disjointed compared to what we observe during the competition," he stated.
The second point he made was that the FAL contributes merely "nominal" worth to the airplane, accounting for just 7%. He highlighted that the genuine value currently resides in fields such as engineering, data, systems, and software—in areas where India provides “outstanding value.”
"When we consider India, there’s significant activity over there. We’re expanding our supplier network. Currently, we purchase about $1.4 billion worth of components and services from India each year, and this figure will rise to approximately $2 billion by 2030. Compared to other sourcing regions, except for engine procurement from the U.S., India leads," stated the Airbus CEO.
He dismissed suggestions about Airbus choosing China over India as it set up the second FAL at Tianjin in the neighbouring country. He said there was already an assembly line in China and the contract was renewed after 15 years. When Airbus started to go out of Europe 15 years ago, it went to China for the first time because at that time the Chinese market was “ramping up significantly”. Today China is a big market but India is growing as a market “very significantly”, he said.
"When we opted to add a second production line in Tianjin, it wasn't about choosing China over India since we were already established in China and aiming to boost our output. The logistics and infrastructure were already set up on that side. Setting up an additional facility elsewhere would be unnecessary... mainly due to the significant logistical challenges of transporting major components. It’s essential to pick a location with access to a port for these purposes. Moreover, managing this complexity has become even tougher as globalization wanes, making international transportation of various parts, systems, and machinery increasingly intricate," explained Faury.
When asked about the differences between China and India, he stated that China operates through "five-year plans." He explained that once these plans are established, everything falls into place—this approach is systematic, organized, and focused on long-term planning. In contrast, India leans heavily on individual ingenuity, entrepreneurial spirit, and companies' independent strategies for growth based on their own business plans. The nature of the workforce and market dynamics differ significantly as well.... Ultimately, it's up to each nation to adjust to prevailing conditions and limitations... capitalizing on their respective strengths," noted the Airbus CEO.
Also read: Tata and Airbus collaborate to produce helicopters in India, aiming for initial production by 2026.
'Indigo and Air India at top of the priority list'
Faury emphasized India's crucial contribution to enhancing the supply chain.
For the aerospace industry, when it comes to manufacturing parts, subsystems, aircraft frames, heavily stressed components, and complex systems, I observe significant competition along with substantial business expansion potential in advanced systems that can undergo reengineering and optimization through Indian engineering expertise," he stated. "This is precisely what we're achieving at Dynamatic, Tata, and Mahindra.
Regarding the civil aviation ministry's objective to develop an additional 150 airports over the next ten years, reaching a total of 350 from the present 200, Faury expressed his amazement at how swiftly these new facilities come online in India. "There isn’t another location globally experiencing such rapid expansion," he noted. The challenge now lies in ensuring adequate resources can keep up with this development; discussions often revolve around our key clients IndiGo and Air India who secure substantial contracts to ensure future space availability. Their order backlog surpasses their global market share significantly," he added.
The Airbus CEO stated that both Indigo and Air India, which have strong ties to the company, stand at "the top of the priority list." He emphasized that since Indigo depends entirely on Airbus products, it’s crucial not to disappoint them as they rely exclusively on the company for their needs. Regarding Air India, most of their aircraft orders come from Airbus. Therefore, the company takes this commitment extremely seriously.
He admitted that they faced supply chain limitations since the demand exceeded the supply. Consequently, Airbus is doing everything within reasonable limits to bolster its supply chain. "Pulling too aggressively does not yield our desired outcome," he explained. "There’s immense scrutiny from everyone involved; you’re falling short of commitments and lagging behind schedule—this holds merit. It becomes imperative for us to strike an optimal balance between meeting customer demands and managing available resources." He concluded by noting improvements in their supply chain operations.
is in France at Airbus’s invitation
(Revised by Zinnia Ray Chaudhuri)
Also read: Modi inaugurates new Airbus C295 facility, hails it as an emblem of 'New India' alongside Spanish PM
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