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M&M to build 5 seater

12 July 2010

M&M to build, fly 5-seater plane in Australia before local launch:

The move is aimed at getting an early global certification and selling the aircraft in the international market

The aerospace arm of Mahindra and Mahindra Ltd (M&M), India's largest utility vehicle maker, plans to build and fly a five-seater passenger plane in Australia in a year's time, ahead of its local launch.

The move, which follows Mahindra's acquisition of two Australian aerospace firms, is aimed at winning an early international certification and selling the plane in the global market, a top executive said.

It has also been necessitated by safety concerns that have bogged down the company's Indian partner--the National Aerospace Laboratories (NAL)--which lost a prototype in a fatal crash last year.

The acquisition of Aerostaff Australia Pty. Ltd and Gippsland Aeronautics, announced in December but completed last week, has made Manhindra the first private Indian conglomerate to have the ability to build planes.

Gippsland has built 250 aircraft to seat two, eight, 10 and 14 passengers, and is qualified for Australia's Civil Aviation Safety authority certification--accepted by agencies such as the US Federal Aviation Administration.

M&M will build the five-seater called NM-5 locally with NAL, the aerospace lab of the Council for Scientific and Industrial Research, India's largest public funded research agency.

NAL received the nod to build the plane under new guidelines from the Directorate General of Civil Aviation (DGCA), India's aviation regulator, last week.

However, NAL faces concerns about its authority to certify vendors supplying components and systems, after the prototype of Saras, a civil aircraft it was building, crashed in March 2009 and killed three persons. The DGCA investigation report criticized the way the Saras project was handled.

"While NAL works with DGCA to win back the confidence, the fact that we have Gippsland in Australia, the NM-5 can be built there. That is the logical thing," said Hemant Luthra, member of the group management board at M&M, who heads the aerospace business.

M&M has dropped plans to design and build a family of planes in the NM series following its Australian acquisition because of certification issues, he said.

NAL director A.R. Upadhya said the agency is being audited by DGCA for approval to a more stringent standard called CAR-21, but has simultaneously begun work on building the small plane in Bangalore.

He did not say how soon the aircraft would be able to fly.

The global general aviation plane market is estimated to be $5 billion (Rs23,250 crore), of which turboprop planes--the segment M&M is targeting--constitute half the business, according to Luthra, who quoted a study by management consultancy A.T. Kearney.

M&M would invest Rs250 crore in the aerospace business, including Rs100 crore in an aircraft making factory, said Anand Mahindra, vice-chairman and managing director of M&M.

Mahindra will also build and test-fly an 18-seat plane designed by Gippsland locally in Australia over the next two years. It also plans to build the planes from the Australian firm in its Indian factory, said Luthra.

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