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Business

India to Airbus “Sleep on it and get back”

By: Karthik :+: Under: Business, It Happens Only in India, Opinion, Politics
On: ⋅ June 22, 2007 ⋅  Email this post ⋅  Print this post ⋅ Post a comment
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India catches Airbus whilst they was taking a nap.

Business + Politics = Alcohol by the gallon + Prescription medication by the ton. The result is never ever good. The Indian Civil Aviation Minister Praful Patel decided to bring up the matter to the press even before the ink had dried on the new contract signed by Kingfisher Airlines.

India wants a matching investment from Airbus, an assembly line very similar to the one being built in China.

Caught in between a rock and a hard place, Airbus had a very cautious response.

The added value of a final assembly line in an aircraft is around 5 percent. There is a reasonably straightforward limit on the number of times you can duplicate investment and management time and effort, We would need to be convinced of the logic.

I am not sure on what Airbuses final answer is going to be, but it better be good, consider this fact

Vijay Mallya, the flamboyant liquor tycoon who heads the UB group, one of the largest spirits makers in the world, started Kingfisher Airlines as a spin-off to its beer brand in 2005.

Since then he has ordered five Airbus 380 super jumbos and now has more than 170 of the European firm’s aircraft on order, representing each of the Airbus aircraft families.

As a business you want to end the year in black, every year. And as a company Airbus has been having trouble with this. The delayed launches and renewed deadlines are eerily similar to when Airbus decided to place it’s bets on a supersonic jet when Boeing decided to take it easy. Two very different paths and today there is one survivor.

It would be foolish for Airbus to invest in India at this point. India’s infrastructure growth is like the Yugo’s 0-60 spec and Airbus sells planes, not cookies, they cannot afford to have 2 plants right next to each other, just because India might buy a lot of planes.

India would have had more success if they went after Boeing instead and if Airbus does not have a decent reaction, expect them to run into “trouble” with the Indian government. Either way, this is a lose-lose situation for the European giant, I am placing my bets on them saying “Effing Kangroos” right now.

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