Airbus doubles investment in India

Airbus said it was more than doubling its investment in India to $1 billion over the next 10 years, setting up an engineering facility and a pilot training school in one of the world's fastest growing aviation markets. The European airplane maker also plans to bring the superjumbo A380 for a test flight to India early next year. Airbus had agreed to invest about $450 million or 20 percent of the $2.25 billion order it won from state-owned Indian Airlines for the sale of 43 aircraft, but Thursday's announcement goes "well past" that commitment, said Kiran Rao, executive vice president of marketing at Airbus. Some $300 million is to be invested in a pilot training center and another $250 million in an engineering center in the southern city of Bangalore.

Airbus also released a study predicting India will need 1,100 airplanes worth $105 billion by 2025. Thursday's announcement by Airbus came months after its rival Boeing Co. unveiled similar plans, committing to invest $185 million to build a maintenance facility, install aircraft simulators and provide training support. Besides commercial aircraft, India also plans to spend billions of dollars on new fighter jets and on the modernization of its air force. Boeing and European Aeronautic Defense & Space Co. or EADS, the company that controls Airbus, are eyeing a share of those lucrative deals. The investment plan unveiled by Airbus is part of some $2.6 billion that EADS aims to spend over the next 15 years in expanding its presence in India.

"Strong demand in India is being unleashed by air-transport deregulation, the emergence of a number of new operators, lower fares, and a large untapped demand for air travel," said John Leahy, chief operating officer for the customer division. In terms of numbers of aircraft, India is set to be the fifth largest market for Airbus and the seventh in terms of value in the next 20 years, he said. India is also upgrading its major airports, including changes to accommodate the super jumbo A-380. One of India's private airlines has already placed orders for the 550-seater aircraft and others are weighing their options. Leahy said Airbus plans to bring the A-380 to India for a test flight between New Delhi and Mumbai. "You will see it in months."

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