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EADS, HAL in pact to build Indian passenger plane

European aerospace giant EADS said on Monday that it had signed a contract with Bangalore's Hindustan Aeronauticals Ltd to build the first Indian-made passenger aircraft.

"We plan to build a 50-seater and a 70-seater ATR turbo-prop aircraft with our Indian partner HAL," EADS India managing director Philippe Advani said.

No date has been set for starting work on the project as the two firms are searching for a launch customer, he added.

EADS India gave no financial details.

The contract, which commits the partners to invest in the project and establishes the shareholding structure, was signed four years after the two agreed to work together on the project.

"We are keen to have an Indian carrier, maybe Indian Airlines, as our launch customer," Advani said.

Turbo-prop ATR aircraft are manufactured by Avions de Transport Regional, a firm owned by EADS and Italy's Alenia.

This is the first time the company, whose products face tough competition from regional jets made by Canada's Bombardier and Brazil's Embraer, will make ATRs outside Europe.

Turbo-props have only recently arrived in the Indian market with privately-owned Jet Airways leasing five turbo-prop ATR 72s for operations on regional routes.

The airline also operates a fleet of 25 jumbo jets.

Market leader Indian Airlines does not operate any regional aircraft and the airline's management said it needs to replace older jumbos rather than acquire small planes.

But Advani said he was optimistic about signing Indian Airlines as a launch customer for the turbo-prop ATR aircraft built in partnership with HAL.

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