Wednesday, May 13, 2020

Airbus, Boeing tell Indian vendors of supplies to slow down deliveries

Bengaluru: Indian vendors of the two major commercial aircraft manufacturers, Airbus and Boeing, have been asked to slow down deliveries as the aircraft makers are set to reduce production by nearly half.

Indian vendors like Aequs and Dynamatic, which make key products for Airbus, have started reducing production by one-third, top company executives told BusinessLine. An HAL spokesperson said the company is monitoring the situation and will decide whether it should cut down production soon.

Apart from manufacturing doors for A320, the public sector HAL supplies flaperons for Boeing 777 aircraft. The flaperons are used to control the roll and as a flap to control a plane’s lift.
Airbus CEO Guillaume Faury in a statement recently said that the aircraft maker is “in the midst of the gravest crisis the aerospace industry has ever known” following the outbreak of the coronavirus pandemic, which put the brakes on air traffic across the globe. Airbus posted a $522-million loss in its first-quarter results, with its CEO stating in an internal communication that it was bleeding cash at an unprecedented speed.

Airbus, according to various reports, had informed its vendors that it plans to reduce the production of its blockbuster aircraft, A320, by half, to 30 per month. Hence, it wanted the vendors to reduce supplies by nearly 40 per cent.
Aravind Melligeri, chairman and CEO of Aequs Inc, said the company manufactures about 3,000 different types of products for the aircraft makers and others. “With air traffic down globally, we don’t see any kind of relief for the current financial year,” Melligeri said. There could be layoffs too, he said. According to reports, Airbus has temporarily shut down some of its factories in other countries and in at least one centre in the US where it is laying off more than a dozen subcontractors.
Dynamatic, the Bengaluru-based aircraft parts maker, which is a tier-one supplier of products for Airbus A330 and single-aisle aircraft like A320, has also said that it is cutting production by 30 per cent. “Airbus has scaled down production of its aircraft and hence asked us to reduce supplies in the near term,” a spokesperson for Dynamatic said. He said the company has reduced supplies by nearly 30 per cent.
Melligeri said all the domestic airlines in India have single-aisle aircraft, and all of them are parked at various airports across the country. “So, the question of adding more aircraft will not arise for some time at least,” he pointed out. According to aviation consultancy company CAPA, India will have a surplus of between 250 and 300 aircraft over the next 6-12 months following the Covid-19 outbreak. The report said for India to return to the pre-Covid-19 operational fleet of 650 aircraft, it is likely to take up to 12 months after flights are allowed to resume services.
13/05/20 K Giriprakash/Business Line
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