Airbus Industrie, Europe's leading aircraft manufacturer, said it is expecting Indian airline companies to cancel or reschedule orders on account of their losses.
"No airline is making money in India because they are selling below cost. The country is seeing a 25 per cent annual growth rate in air passenger traffic but some slowdown is also expected. These are some of the pains when markets open up," said John Leahy, chief operating officer (customers), Airbus.
Leahy, however, declined to offer details.
Airbus has orders for five A380 aircraft from the Vijay Mallya-owned Kingfisher Airlines, which plans to start international flights shortly. It also has orders for eight A330 200 aircraft from Jet Airways, India's biggest private airline.
On Tuesday, Naresh Goyal, chairman of Jet Airways, said Indian aviation companies are expected to incur a loss of $2 billion in the current year owing to low pricing and pressure from rising aviation turbine fuel prices.
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Jet Airways made a loss of $23.1 million during the October-December quarter of 2007-08 against a net profit of $9 million in the corresponding quarter of 2006-07 and has deferred declaring its results for the latest quarter.
Airbus, however, continues to see India as a key market, both in terms of sales and research.
"India is one of our prime strategic partners. You can't be global without being in India with its large number of highly skilled, motivated and knowledgeable people," said Airbus President and Chief Executive Officer Tom Enders.
"We are capitalising on the incredible energy and entrepreneurial spirit in this country and have initiated research and technology cooperation projects with some respected Indian universities," he added.
Last year, Airbus opened its first Indian Airbus Engineering Centre in Bangalore, where Indian engineers are responsible for advanced modelling and simulation for the A380 and the A350.
"We started with 25 engineers and will now quickly grow to 300 Indian employees. Together with suppliers, we have more than 1,000 employees in India already. I believe there is more to come," Enders said.
(The reporter is in Berlin at the invitation of EADS, the European aerospace concern of which Airbus is a subsidiary.)