India's Airbus Orders Rise as Supply Chain Stabilizes

India's Airbus Orders Surge Amid Supply Chain Recovery

Airbus's Growing Presence in the Indian Aviation Market

Airbus has identified IndiGo and Air India as two of its top three global airline customers by backlog volume, according to Benoit de Saint-Exupery, the aerospace company’s Executive Vice President for Sales of Commercial Aircraft. IndiGo currently awaits delivery of 916 aircraft, while Air India has 344 planes pending, predominantly narrow-body models. Malaysia-based AirAsia Group, which previously operated a joint venture airline in India with the Tata Group, holds the second position with 393 aircraft on order.

Supply Chain Stabilization and Production Ramp-Up

Speaking at the International Air Transport Association (IATA) Annual General Meeting in Delhi, Benoit de Saint-Exupery conveyed encouraging news regarding the easing of delivery delays that have frustrated airlines globally, including those caused by Boeing’s supply challenges. Airbus has returned to pre-pandemic production levels, manufacturing 60 A320 family single-aisle aircraft per month. The company aims to increase this output to 75 planes monthly by 2027. De Saint-Exupery emphasized that every commercial Airbus aircraft produced going forward will be partially manufactured in India, reflecting the country’s growing role in the company’s global supply chain.

Expanding Airbus’s Footprint in India

When questioned about the possibility of establishing a final assembly line (FAL) in India to support the substantial order book of 1,750 aircraft from IndiGo and Air India, de Saint-Exupery noted that Airbus currently operates final assembly lines for other products in India, including the H125 helicopter for civil use and the C295 military aircraft. However, for commercial aircraft, Airbus is prioritizing expanding its industrial footprint through increased sourcing from Indian suppliers rather than setting up a commercial aircraft assembly line. The value of Airbus’s sourcing from India has grown significantly, rising from $500 million in 2020 to over $1 billion in 2023, and reaching $1.4 billion last year. The company projects this figure will hit $2 billion before the decade concludes.

India’s Strategic Role for Airbus

Remi Maillard, President of Airbus India and Managing Director for the South Asia region, underscored India’s importance beyond being a mere market. He described the country as a strategic resource and an industrial base critical to Airbus’s global operations. This perspective aligns with the company’s ongoing efforts to deepen its engagement with India’s aerospace ecosystem.

Outlook on Supply Chain Challenges

Addressing the persistent challenges of supply chain disruptions that have affected aircraft deliveries, Benoit de Saint-Exupery acknowledged the initial signs of stabilization. Nonetheless, he cautioned that the situation remains dynamic and requires continuous vigilance, given the unpredictable nature of global supply chains in the current environment.