Author: Aaron Chaze



Expanding: Wal-Mart
takes on India

Airbus Industries unveiled its investment plan for India that it projects will help it capture 50% of the incremental demand for aircraft from India’s rapidly expanding airline and freight industry. The amount will be invested over 10 years and will commence with a $250 million investment in an engineering facility and a $300 million investment in a pilot training center with eight flight simulators. These will be built over a five-year period.

Airbus has also short-listed two Indian companies to partner with it in establishing a maintenance, repair and overhaul (MRO) facility in India, which will serve the Asian region. According to the latest Airbus forecast, India will be the fastest-growing market for air travel in the next decade. The company predicts India’s aviation sector will require 1,100 aircraft over the next decade of which 935 will be passenger and 165 freight carriers. In the past three years, seven new airlines have started operations in India, and Indian carriers have placed $30 billion worth of orders with Airbus and Boeing. Indian Airlines is the market leader, ordering 43 Airbus A320s.

Airbus is not the only mega-corporation eyeing the Indian market. Wal-Mart, the world’s largest retailer, has joined India’s Bharti Group to set up a chain of Wal-Mart superstores across India. These stores will probably be co-branded and will be managed through a joint venture. India’s retail market is estimated to be worth around $220 billion a year, but 96% of these revenues are generated in the “unorganized sector” and by stores under 50 square feet in size. Organized retailing through superstores is currently growing at 30% per year.

The Indian stock markets, too, continued to rise, with the benchmark BSE Sensex index touching a new all-time high of 14,028 points on December 5. The index reflects the continuing strong corporate performance in late 2006, sustained foreign investor portfolio inflows and strong macroeconomic growth rates.

Aaron Chaze