This option (C295) has the potential to enhance the order for the C295 aircraft by another 100 at the very least. Besides, the Airbus-TASL joint venture company will virtually become the proverbial ‘Jewel in the Crown’ for Prime Minister Narendra Modi’s ‘Make in India’ scheme.

In the middle of May last year, the Defence Acquisition Council (DAC) finally cleared the long awaited project initiated by the Indian Air Force (IAF) for the acquisition of 56 medium-lift military transport aircraft to replace its obsolescent fleet of Hawker Siddeley HS-748 twin turboprop transport aircraft whose induction into the IAF had commenced as far back as in the early 1960s. In the process of evaluation of the three contenders that responded to the global tender, the Airbus C295 was selected against others namely the C-27J Spartan manufactured by Alenia Aeronautica of Italy and the An-32 offered by Antonov of Ukraine. Both these aerospace firms had joined the race with Airbus Defence and Space for the contract in response to the request for proposal (RFP) floated in mid-2013.

Emergence of an Indian Player

As per Airbus, the contract for 56 aircraft, which is valued at around $2 billion, was expected to be signed within two years after the preferred platform was identified. However, this is yet to happen. This particular tender has clearly two unique features. Firstly, this will perhaps be the first project wherein a military transport aircraft will actually be manufactured in the country by an original equipment manufacturer (OEM) from abroad, Airbus Defence and Space in this case, through a joint venture partnership with an Indian company Tata Advanced Systems Limited (TASL). This is a wholly owned subsidiary of Tata Sons and is located on the outskirts of Hyderabad. Secondly, this is also the first major project wherein the state-owned Indian aerospace major Hindustan Aeronautics Limited (HAL) has not been allowed to participate in the bidding process and instead, doors have been flung open to the Indian aerospace industry in the private sector.

This hard decision was taken despite the fact that HAL is the only aerospace company in India that has any experience in building military aircraft even though primarily under licence. On the other hand, the Indian aerospace industry in the private sector, relatively speaking, has very little experience and is generally regarded as being practically a novice in the field. However, in just five years, TASL has evolved into a significant player on account of its notable contribution to the global aerospace industry. The company has become an important manufacturing partner for global OEMs delivering over 1,00,000 parts in a year to various end customers all over the world. Partners of TASL in the global aerospace industry include Sikorsky Aircraft Corporation for whom it makes cabins for the S-92 helicopters, Lockheed Martin Aeronautics for whom the company manufactures airframe components for the global supply chain of the C-130J Super Hercules military tactical transport aircraft. Other aerospace firms that TASL has partnered with are Pilatus Aircraft Ltd of Switzerland, Cobham Mission Equipment and RUAG Aviation. The company has developed capabilities across the entire value chain of the aerospace industry from design to full aircraft assembly. There ought to be no doubt that this company in the private sector of the Indian aerospace industry is poised to emerge as a major player in India in this sector. It is also the first company in the private sector of the Indian aerospace industry to be certified by the Indian airworthiness authority, Centre for Military Airworthiness and Certification (CEMILAC) to ‘AS 9100: Rev B Standard’ stipulated for the design of airframe structures.

Economy of Scale

As per Domingo Ureña Raso, Vice President Military Aircraft, Airbus Defence and Space, the C295 is clearly the best aircraft to replace the Avro fleet of the IAF. Also, Airbus is of the view that TASL is the “cream of the Indian private aerospace sector” and that the OEM has entered into the best possible partnership arrangement available in India for building the C295 aircraft. However, one issue that could of concern is the size of the order for the IAF. Apart from the first 16 aircraft that the OEM is to supply in fly-away condition directly from the factory in Spain, the requirement of the IAF has been currently pegged at mere 40 platforms that would be manufactured in India. This number is much too small to provide the benefit of economy of scale that the joint venture company would like to have to justify the sizeable investment both the partners would have to make for creation of infrastructure as well as for building up a cadre of specialist human resource. The answer to this dilemma lies quite obviously in enhancing the orders from the Indian armed forces and possibly from the civilian segment for some specialised tasks. Over and above the demand from within the country, it would also be necessary to access the global market which the OEM should be quite capable of providing. Airbus already has a well established presence in the global market with orders from 19 countries, several of which have placed repeat orders. In the last one year alone, the company has received orders for 20 aircraft from five countries.

Potential Market for the C295

The fleet of 56 C295 aircraft that have been ordered to replace the ageing Avro fleet, will be employed for carriage of military personnel and cargo routinely as also for airborne assault operations during war. The Indian paramilitary forces such as the Border Security Force (BSF) and the Indo-Tibetan Border Police (ITBP) are likely to acquire a few aircraft to meet with their transportation needs. In addition to the cargo and passenger carrying versions, the aircraft is available in a number of other variants as under:

• Airborne early warning with Israeli AESA radar
• Maritime patrol/anti-submarine warfare
• Gunship AC-295
• Waterbomber for fighting forest fires

As the aircraft can be made available through local manufacture by the joint venture company in India in a number of variants, there would, in all likelihood, be a decent potential market in the country itself. The IAF could in due course consider induction of the airborne early warning and the gunship variants. The Indian Navy could well consider the maritime patrol/anti-submarine warfare version instead of looking at sources abroad for such platforms. The Indian Coast Guard too could acquire these platforms modified for maritime patrol.

But perhaps the largest potential for demand within the country lies with the IAF. Today, the IAF operates a fleet of over 100 An-32 twin turboprop tactical transport aircraft that would have to be retired from service in another 15 years or so. A project to develop a medium-lift military transport aircraft jointly by HAL and United Aircraft Corporation (UAC) of Russia with a payload capability of 20 tonnes was initiated in 2009. The aircraft designated as multi-role transport aircraft (MTA) was being developed to replace the An-32 fleet. The initial order for the IAF was pegged at 45. However, seven years after the project was conceived, reports in the media indicate that the project appears to have hit a roadblock that seems to be insurmountable. The issue of contention appears to be the power plant. The IAF is seeking a modern engine with FADEC which the Russian partner is not willing to provide as it would take many years to develop one and the associated cost escalation. As per reports emanating from Russia, UAC is prepared to go ahead with the development of the MTA and dump the Indian partner. In this situation it makes little sense for the nation to continue to remain associated with the project as it can no longer be regarded as ‘Joint Development.’ The decision to withdraw from the MTA project ought not to be difficult especially as a readymade solution by way of the locally manufactured Airbus C295 that has a payload capacity of just over nine tonnes, would be available to replace the An-32 fleet which has a payload capacity of seven tonnes. This option has the potential to enhance the order for the C295 aircraft by another 100 at the very least. Besides, the Airbus-TASL joint venture company will virtually become the proverbial ‘Jewel in the Crown’ for Prime Minister Narendra Modi’s ‘Make in India’ scheme.