NEW DELHI :
Airbus SE is confident of delivering more than one plane per week to its customers in India for the rest of 2019, although it continues to battle issues with Pratt & Whitney (P&W) engines that power some of the A320neo planes used by IndiGo and GoAir.
Anand Stanley, president and managing director, India and South Asia at Airbus, says A320neo planes with P&W engines are safe and that much of the uproar against snags with the engines are “perceptional" in nature. Edited excerpts from an interview:
How you feel about several instances of snags involving P&W engines reported in the last few months?
The number of issues (with P&W engines) are continuously improving. A perception was fed about these engines, which is incorrect. There were certain differences—that are technical (in nature)—which entered the public domain. For instance, the numbers for both planned removal of engines and engine removal due to failures were both combined and put out on multiple media platforms. The two can’t be combined, and therefore merging the two to create panic is unacceptable, especially when it creates safety scare which is truly damaging for the OEMs (original equipment manufacturers), airline and passengers. A320neo family aircraft and (P&W) engines have met all regulatory, safety and reliability requirements.
When do you expect the issues with P&W engines to be resolved?
Originally, teething and maturity issues were identified. The rate at which these were solved, and amount of resources that have been put in, is tremendous. Otherwise, you will not see the improvement and significant reduction in the rate of these issues. Some of the issues related to P&W engines have been addressed. It’s a new architecture that has been introduced so it has some teething issues. However, I emphasize this is an extremely safe engine, which meets all reliability parameters, and it is coming closer and closer to 100% reliability mark. We are at 99.98% without the new upgraded engine, which will come in later in September. The upgrades will continue to improve reliability and robustness of engines. We are going to continue to meet and exceed our reliability threshold, which we are doing and will continue to do. We are continuing into invest in the engine and improving it. The engine reliability will continue to improve.
Do you expect a slowdown in the aviation industry?
There are two different thoughts about the gross domestic product (GDP) slowdown—one is that let’s not talk ourselves into an economic slowdown when there isn’t one. The second school of thought is that even if there is a slowdown, we are talking about few quarters and not years.
Car sales are falling.
Car is a different industry in terms of penetration. My opinion is that air passenger growth usually grows 2X (two times) of GDP. So, if you look at it, when we were growing at 7% (GDP), air passenger traffic was growing at 20%. After Jet was grounded, we were still growing 2X of GDP. Even if GDP growth falls below 5%, Indian aviation can still sustain a 10% growth in passenger traffic. The second thing is one can’t stop people from flying especially when the amount of disposable income is rising. The fundamental reforms in the country, at the grass roots level like literacy rates, infant mortality rates, life expectancy don’t get impacted cyclically due to slow GDP growth for a quarter or two. And India has so much upside that it thumps any quarterly slowdown.
But, domestic air traffic has grown at the slowest pace in the past five years in July?
The important point is to look at the load factor. A lot of airlines are still flying with a load factor of above 90% (on major routes). If you want to talk about it, I see that the planes are still flying full. I think the demand far outweighs supply in India even today. It’s the question of how many planes can be slotted in the (existing) airports.
How do you see the Indian aviation market mature in the coming years?
The majority of international traffic from India is mostly dependent on single-aisle planes which are going to places like Dubai, Singapore, Bangkok, and Riyadh, (destinations that are four to six hours away). Long-haul is still done only by Air India. The wide-body market’s time hasn’t even started. And this will take some time because a lot of airlines are still addressing the structural challenges they face like the cost of jet fuel, taxes, etc. We expect tremendous amount of passenger growth during the next 10 years. And during the next 20 years, we should see exponential amount of international growth.
However, there are few structural issues that have to be addressed to achieve this. One is the high taxation on jet fuel, which needs to be put under purview of goods and services tax. We need to see a policy that will put Indian MRO (maintenance, repair and overhaul) industry in a level playing field against the MRO industry in Bangladesh, Malaysia, Dubai and Sri Lanka, in terms of reducing taxes.
The third big area is the wide-body policy (tax) to ensure that there is a level-playing field for Indian airlines to compete with long-haul wide-body operations of major international players.