As the government gears up to announce the results of the expression of interest for 111 naval utility helicopters — the first project under the strategic partner procurement model — Airbus Helicopters, which has tied up Mahindra Defence, expects the Centre to award the project in a timely, transparent and fair manner. In an interview with PRANAV MUKUL, Airbus Helicopters India president Ashish Saraf and Airbus Helicopters executive vice president–Procurement Martin Schuebel talked about the company’s plans for developing a local supply chain system for manufacturing of helicopter components in India. They also talked about a variety of issues such as disinvestment of Pawan Hans and the outlook of helicopters industry in India. Edited excerpts: Are you concerned about the delay in disinvestment of Pawan Hans? Saraf: (We are) concerned because due to disinvestment, they are not able to make capital acquisitions. So expansion of that company is really not happening. Although they are maintaining their fleet and they are our largest customers of the Dauphin fleet across the world, we are hoping that they can grow and they can get on with their fleet replacement plans or modernisation plans, which seems to have been hindered because of the disinvestment process. So I hope this process finishes off really quick and the company gets on to the next phase of modernisation. Once they get on with the next phase of expansion, obviously it will be for us to work with the new potential owner of this company. We feel confident that we should be able to work with them and propose solutions that will allow them to expand with out fleet. Private firms had raised red flags about participation of Hindustan Aeronautics Ltd (HAL) in the naval utility helicopters tender. How do you see it? Saraf: The strategic partner programme is for private companies. We hope that the government upholds the spirit of strategic partnership, which is mainly meant for the private sector and we hope that this continues to be a programme as advertised or stipulated initially to be a strategic partnership private sector program. What I would allow myself to add is that the need for helicopters in India is such that there is room for a DPSU (defence public sector undertaking) like HAL and a private strategic partner. So one does not need to replace the other and the needs are so huge that there is room for everyone. Defence deals in India have traditionally been scrutinised a lot. How easy is it for defence manufacturers to do business here? Saraf: It clearly has been easier to do business — may it be inviting comments on the new DPP (Defence procurement procedure) or the new offset policy or even the strategic partnership, I think the government has done a good job of consulting the industry to formulate some policies. Now, this has been the first programme that has been launched with such intentions of Chapter 7 being the driver of the strategic partnership programme. With our motto of ease of doing business, we really hope that the government sticks to the timeline and transparency and fairness of selection. So that contracts could be awarded in a timely manner. One of the concerns raised by aircraft makers with India is the lack of enough skilled labour. How do you plan to overcome this challenge? Schuebel: We have spoken to over 70 suppliers with the objective of developing a supply chain base or ecosystem for manufacturing of helicopters. Now, some of them are our suppliers for different businesses. Airbus has about 50 suppliers in India and we buy over $600 million worth of hardware and services out of India. Some of them already know Airbus well and there are a lot more who we plan to induct in some capacity or the other, going forward, who would be trained and imparted knowledge about our processes are concerned. India has a wonderful prospect and a wonderful market potential not only on the military but also on the civil and what we call para-public including emergency medical services. Now there might be a chicken and egg problem that there are not enough qualified personnel available, but we really want to get out of this problem and start qualifying our suppliers for a journey that we want to do together and we are looking for sustainable partnerships. Are there any India-specific challenges that you have come across in the manufacturing value chain? Schuebel: I would say the typical challenges for helicopters or helicopter components is that quality is a must. There’s no doubt about it. Safety is a must and highest standards in terms of quality and safety for all the components; the highest standards in terms of weight saving, low weight design, solutions is a must — this I would say is key. Then, of course, you need people who are knowledgeable and available to develop such solutions, industrial solutions and provide them to us. What is your outlook on the helicopter industry in India? Saraf: Currently, the primary drivers are VIP, heli-tourism and state government requirements. We are also looking at potential growth coming from HEMS (helicopter emergency medical services), urban air mobility as well as regional connectivity for the helicopter industry. Going ahead, do you have any growth targets in mind? Saraf: As of now we have about 250 helicopters, and we are adding anything between 7-10 helicopters a year in our region — India, Nepal, Bangladesh and other complementary markets. So, we currently look at growth of 3-4 per cent. With segments such as HEMS, tourism, etc opening, we see the potential to add about 100 helicopters. We are working with the right stakeholders to see how policy can be rolled out to ensure these markets can be developed. With the exception of Pawan Hans, there isn’t a large player in the helicopters segment. Do you think there’s enough appetite for this sector on a national basis? Saraf: We need a large player. Currently, there are operators who have 3-6 helicopters in specialised areas like Chardham Yatra, Vaishnodevi, etc. But except Pawan Hans, there has not been a national helicopter operator having the ambition of expanding to different states and segments. This is certainly required and a large player with a significant vision for the longer term will certainly bring a lot more value for expanding into this segment.
