European aircraft-maker Airbus announced plans yesterday to push deeper into the key Asian market, including booming India and China, with plans to build facilities and establish partnerships.
The manufacturer plans to build a final assembly line in China and an engineering and services center in India as part of its bid to conquer the Asian market, which the industry says will lead global growth in air passenger traffic over the next 20 years.
Airbus has also offered to collaborate with industry partners in Russia, Airbus president and chief executive Gustav Humbert said at Asian Aerospace, the world's third-largest airshow.
On the back of a record year with 1,111 aircraft orders worldwide last year, Airbus is seeking to entrench its position in India and China as it duels with US arch rival Boeing for dominance.
"Yes, Asia will be the big growth market and Airbus will have a major market position there," said Airbus chief commercial officer John Leahy.
Airbus said total orders last year gave it a 52 percent share of the global market.
But the company has previously admitted it was behind Boeing in wide-body, long-range order intake, where the US manufacturer had 55 percent market share last year.
"We are convinced that in our industrial setup, we have to be more global, we have to be transnational," Humbert told reporters.
Boeing has more than 70 percent of the market in China, where Airbus is currently scouting four areas as sites for its proposed facility.
If agreement is reached with the Chinese partner by mid-year a contract for the project will be signed, Humbert said.
A key incentive of allowing China to produce Airbus jets for the first time was attached to a deal clinched in December for 150 mid-range A320 planes worth nearly US$10 billion at list prices, China's biggest-ever deal with Airbus.
The cooperation protocol foresaw the "possibility" of establishing an Airbus assembly plant in China that would turn out single-aisle planes.
Airbus currently has 20-30 people in China helping in preparations for the assembly facility, but this could rise to 300-400 staff by 2010, the scheduled start of the assembly line.
With only four aircraft a month to be produced from the planned facility in China, assembly lines in Europe would still continue making planes for the Chinese market because of the huge demand, Humbert said.
"It's a win-win situation," he said, allaying fears European jobs could be lost.
For India, Airbus is in initial talks with possible partners to establish an engineering facility and a service center.
Humbert said the service center has become necessary because almost all of the newly established Indian airlines bought Airbus models. Airbus also wants to make use of India's expertise in information systems.
For Russia, Humbert said Airbus is offering a 50-50 collaboration program with partners in the newly restructured aviation industry which is expected to yield more than US$20 billion worth of benefits over a 20-year period.
The partnership would involve conversion of passenger aircraft into freighters and development of the next-generation single aisle aircraft after 2015.
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