India can tap outsourcing avenues in aerospace: Airbus

Chennai, Sep 12 : With the European aerospace industry looking at cutting costs, India can become an important outsourcing destination, an official of aircraft major Airbus Industrie said here Friday.

'Airbus is into cutting costs by outsourcing components. In future, we will outsource engineering as well as production jobs,' Martin Kraus, who heads Airbus A400 Military Systems, said here.

According to him, the challenges faced by Airbus in the civilian segment are increased competition from aircraft manufacturers in Brazil and China, low value of the American dollar and volatility in oil prices.

In the military segment, the defence budgets of European countries are coming down, Kraus said during his address at Connect 2008, an informiation, communication and technoogy meet organised by the Confederation of Indian Industry (CII).

Dwelling on how Indian companies could take advantage of the outsourcing opportunity that Airbus presents, Kraus said India had to improve its skills in the spheres of avionics, designing and engineering.

According to a CII study, the aerospace industry globally spends USD 60 billion on engineering every year. India accounts for less than one percent of the total offshoring in the engineering services space.

'The challenges lie in upgrading skill sets in designing, transforming from engineering services to a partner in product design, and investment in technology projects,' Kraus maintained.

According to him, the vast young population that India has could be effectively channelised to tap the opportunities available in this sector.

'The average age of a US aerospace industry worker is over 50 and the bulk of its workforce would retire in a decade. On the other hand, US educational institutions are not churning out enough people to meet the expected shortfall,' said John W. Douglass, former president and CEO of the Aerospace Industries Association of America.

Meanwhile, CII has proposed that an aero park be set up in Chennai. This is envisaged as a 4,000-acre facility that will enable global players design, manufacture and maintain all types of aircraft, both civil and military.

'We will have to study the proposal and understand the challenges in creating such a park,' Tamil Nadu industries secretary M.F. Farooqui told reporters on the sidelines of the event.

The proposed aero park is expected to have its own runway, design and engineering city, manufacturing compound, aero university, satellite maintenance facilities, repair and overhaul facilities, a research and development centre and test laboratories.