Aequs to make component for Airbus A320neo

Aequs will supply 100,000 machined parts that will be used to mount engines on the wings of Airbus' A320neo aircraft over the next few years

Airbus, the European aircraft maker, has signed a contract with component maker Aequs Aerospace (based at Belagavi, Karnataka) for manufacture of titanium components as it ramps up production of its A320neo aircraft for global consumption.

It is the first time an Indian company is getting a contract for the manufacture of critical components in an Airbus plane. Aequs will supply 100,000 machined parts, for use to mount engines on the wings of the A320neo aircraft over the next few years, to be made at its 100,000 sq ft factory at Belagavi (earlier Belgaum). The company is already a Tier-1 supplier for Airbus, one among 12 such suppliers in India (including government-owned Hindustan Aeronautics that manufactures doors for Airbus planes).

IndiGo, this country's largest passenger airline by market share, recently took delivery of its first Airbus A320neo, part of an order of 24 aircraft to be delivered by March 2017.

“India is a strategic market for Airbus, not only for its market size but also because of access to the right skills and resources. We’re growing from strength to strength,” said Srinivasan Dwarakanath, president of Airbus for India.

Airbus procures close to 80 per cent of the components that go into its planes from vendors across the globe. It says the contribution from Asia, especially India, is rising. Sourcing volumes from India have grown by 16 times in the past decade. Procurement from India – information technology, customer support and components – was $500 million (Rs 3,335 crore) in 2015 and is expected to grow to $2 billion in 2020.

For Aequs, the partnership with Airbus poses a $75 mn revenue opportunity by 2020. The company plans to hit revenue of $100 mn this year and $300 mn by the end of the decade.The company claims 85 per cent domestication of manufacturing components.

“It’s about creating value and shrinking the supply chain. That’so why Airbus is interested in us to build this eco-system. Today, we are one location where you can bring in raw materials, forge, machine, surface treat, assemble and ship it to a customer,” said Aravind Melligeri, chairman and chief executive at Aequs.

Airbus has grown its supplier base in India from three entities a decade earlier to 45-odd today. The country’s growing demand for aircraft matches its growing prowess in aeronautic manufacturing capabilities. Airbus says it takes close to 25 years to develop a country as an aeronautic hub and while India has the potential, it has a long way to go before it can get there.

With an order backlog of 528 aircraft for this country, Airbus said it would begin delivering a plane every week to India for the next 10 years, starting in the second half of 2016. To tap into all aspects of this growing system, the company will subsequently expand its engineering, customer service, aerospace parts supply and research and technology innovation arms here.

It recently announced the setting up of a pilot training facility on the outskirts of Delhi, for which it has allocated $40 mn (Rs 270 crore).