HAL plans $100 mn aircraft market foray

State-owned Hindustan Aeronautics Ltd is evaluating proposals made by its market advisor, SBI Capital Markets, to buy 10 per cent stake in an international consortium led by American and European aircraft-makers to foray into the civilian aircraft market.

SBI Capital Markets has submitted its proposal to HAL for buying stakes in the consortium, promoted by Russia's Sukhoi design bureau and the US's Boeing Co, by investing $100 million, A K Saxena, managing director, HAL told PTI in Mumbai.

"The project is in the stage of commercial analysis...We have appointed SBI Capital Markets as commercial consultant. They have recently submitted their suggestions, which is under consideration of HAL board...We will take a decision soon," he said.

Pitching for a space in the civilian aircraft segment, HAL plans to join the project as the fifth risk partner. The company would produce airframe modules, which contain critical components including empennage, canopy frame for the RRJ family, Saxena said.

Christened as Russian Regional Jet with 60, 75 and 95 seat capacity, the basic design of the aircraft would be done by Sukhoi and would be powered by a SaM 146 engine developed by French aeroengine major Snecma Moteurs and its Russian counterpart NPO Saturn.

Tulose-based Thales will provide avionics while Boeing will take care of body and certification procedures.  "The design and engine development has been completed and the maiden flight is planned in 2007 with first deliveries expected by 2008," Saxena said.

Since its formation in 1942, HAL has been tasked with the overhaul and upgradation of military aircraft. The company has now started sourcing airframe modules and structural assemblies for the Airbus family of airplanes and engine components for Snecma.

RRJ will compete with Brazil's Embraer and Canada's Bombardier for a market share in the regional passenger jet market, which according to Sukhoi estimates, is expected to grow at 25 to 30 per cent in the next five years.

The Russian aircraft maker targets to sell atleast 800 RRJs by 2020 aiming a 16 per cent market share.

Though the primary demand for RRJ was expected to originate from Russia and other members of the Commonwealth of Independent States, consortium plans to market the aircraft worldwide with Russian and Federal Aviation Administration certification.