NEWS

Aero India set to spread wings
February 5, 2007, Business Standard
Bibhu Ranjan Mishra & Aravind Gowda / Bangalore


If the Farnborough and Paris air shows have put England and France permanently at the top of the league of global aviation marketplaces, the Aero India show is set to take India several notches up the same table, albeit at a lower level.

From a modest beginning as a defence exposition in 1996, Aero India 2007, the sixth edition of the biennial event, has matured beyond recognition, drawing attention from all the global aviation biggies.

The unprecedented interest in the event slated for February 7-11 has been prompted by two factors --India arriving as a credible and promising destination for aerospace manufacturing and the opening up of the Indian skies. India’s rising security profile has also made the country a significant market for aerospace industry.

The fact that Farnborough International Ltd (FIL), the organiser of the Farnborough Air Show, has joined the Ministry of Defence and the Federation of Indian Chambers of Commerce and Industry (Ficci) as co-organisers, underlines the growing importance of the show.

In all, 450 firms are expected to participate in Aero India 2007, up from 380 in Aero India 2005. The number of foreign firms among the air show participants will be 275, against 232 in the last event. The number of visitors at the mega event is expected to be about 35,000, including 4,000 international visitors.

After the US lifted its sanctions sanctions imposed on India in post- Pokhran nuclear test in 2001, US-based defence suppliers have been busy establishing their base here.

In this scenario, most of the companies feel that India, the third largest importer of defence hardware in the world with an overall defence Budget of $ 20 billion in 2006-07, is a market which cannot be ignored.

Most global defence vendors, even though they are yet to get a breakthrough in terms of orders, are in talks for a possible partnership with local vendors, manufacturers and designing firms for possible cooperation pacts and joint ventures.

Their aim is both, to meet the offset obligation (buybacks from India against official Indian purchases) and leverage the cost advantage that India represents.

Companies like Boeing IDS, Lockheed Martin, Raytheon Missile Systems, BAE Systems, Embraer, Bombardier and Bell Helicopter, who are bidding for various defence deals are among the most active participants in the event.

Aero India this year will also see parti cipation by a range of IT majors like TCS, Wipro, Infosys, HCL and IBM, and engineering product designing and development solutions providers like CADES and Quest.

HCL ,which expects to make a splash says that 6 per cent of its total revenue comes from aerospace practices, while TCS is planning to showcase its engineering excellence and operational efficiency in areas like aero-structures, aero-engines and derivatives, knowledge-based engineering and Radio Frequency Identification Device (RFID).

Hindusthan Aeronautics Limited (HAL) is also full of enthusiasm for the event. The company has twin objectives--to showcase its products, and also its engineering and manufacturing excellence.

“We are in talks with almost every participating firm like Boeing, Airbus, Pratt & Whitney, Eurocopter, Lockheed Martin and Martin Baker,” HAL sources said.

The huge participation in the mega show has already had its impact on the local hospitality industry. Sources say that most of the 10,000 rooms in luxury and budget hotels, and service apartments have been booked weeks before the event.

Topline Hotel Leela Palace Kempinski has all its 256 rooms booked till the show is over, even though the tariff ranges $500-700 per night. All the 182 rooms in Hotel Grand Ashok were booked since the last one month. In fact, air chiefs of more than 30 participating nations are staying there, according to the hotel sources.

With room availability in Bangalore becoming almost nil, the focus is on Chennai where the average tariff is in the $200-$300 range.

The organisers of Aero India are planning to operate charter flights to ferry delegates from Chennai to the Yelahanka airbase, the venue of the air show. This makes a tag of $300-400 for a hotelroom and return fare on a charter flight distinctively attractive.