How the growth of the aeronautic market and the low cost of manpower in India can be profitable for both Europe and India

Abstract

India's defence minister has opened the country's Aero India 2005 air show with an invitation for global aerospace firms to outsource jobs to the nation. "There is tremendous scope for outsourcing from India in areas where the companies are competitive,"1 said Mr Mukerjee. Today the maturity of the European aeronautic market forces big players looking forward for some alternative opportunities of growth. Boosted by their fast expanding aviation market, emerging Asian countries are today one of the main target of Global aviation industry. At the same time, European companies are struck by an increasing pressure on the cost mainly due to non-competitiveness of the Euro. This tightened situation urges them to find solutions to reduce their costs. India with both its low cost man power and its tremendous potential market will be definitely the place to be for companies as Airbus or Boeing. Even if this country faced structural issues, it cannot be denied that it will be the ‘market of the future’. To cope with its new challenge, European aviation industry must analyse these new opportunities. How the growth of aviation market and the low cost of manpower in India can be profitable for both Europe and India? Why India should open its growing market? How European must approach this complex market? The strategic analysis of the world aeronautic industry will provide a good understanding of both the trend of the military and the civil global market. Then, a briefly presentation of the different European leaders all subjected to cost pressure will underline their increasingly attraction towards emerging Asian countries. Indian aeronautic market growth add to its high skilled and low cost work force will be balanced with structural issues India is confronted. A comparative analysis of India and China through the concrete example of CATIC and HAL will explain how India can compete with China. Finally, recommendations for both European and Indian companies will be provided to help them make profits together.