Mahindra Group’s Multi-Million Deal With Airbus

The USD 16.9 billion Mahindra Group having headquarter in Mumbai and with over 200000 employees across 100 countries, on Monday confirmed a multi-million dollar aerospace contract with European consortium Airbus at the Paris Air Show. The deal was clinched by Mahindra Aerospace, a subsidiary of Mahindra Group, marking a major milestone in the ‘Make in India’ initiative.

Mahindra Aerospace was formed in 2008 as a part of Mahindra & Mahindra's Systech Sector, it was formed to offer expertise in automotive design and manufacturing to the aerospace industry with a vision to expand portfolio of utility aircraft to fulfill global demands. It also aims, to become a tier 1 supplier of aircraft structural components and assemblies to the world market. The company has two business units: Utility Aircraft and Aerostructures.

This contract is a multi-year aero components manufacture and supply contract. Mahindra aerospace is the only Indian company that builds planes, which are built in Australia, and it is the only business house that covers all three wings of defence - Army, Navy and Air Force. Mahindra Aerospace currently manufactures the Airvan 8 utility aircraft at its facility in Australia and almost 200 such Airvan 8’s are in service at present. The company is also developing a 10-seater Airvan 10 turbo-propeller plane, which is scheduled for certification this year.

Anand Mahindra, Chairman and MD of Mahindra and Mahindra, informed media that, “This is significant as a vote of confidence in Make in India, the ‘first tika’ in this broad vision, as well as a vote of confidence in Mahindra” and “Getting such a contract is a lengthy process which takes a lot of cooking and brewing and this implies Mahindra is now in the inner circle of suppliers”.

The financial details of the contract has not been disclosed yet, but it will involve a various metallic components produced by Mahindra, in excess of a million parts per annum, to be fitted into several Airbus aircraft programmes as part of assemblies produced by Premium Aerotec. The parts will be produced at the Mahindra Aerospace unit located at Narsapura near Bengaluru, which was inaugurated in 2013 and is certified to demanding Airbus specifications as well as aerospace industry standard requirements. After production it is delivered to Premium Aerotec’s facilities in Germany, this process is scheduled to start this year.

Lars Kastle, Senior Vice-President Finance, Procurement and IT Management, Premium Aerotec, said: “For Premium Aerotec, this is the start of a strategic partnership with Mahindra Aerospace. It represents an important step in our restructuring efforts to rearrange our supply chain in collaboration with global partners.”

Premium Aerotec is a 100 per cent subsidiary of the Airbus Group and one of the world’s leading suppliers for the development and manufacture of large aircraft structures for civil and military aircraft.