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Mahindra, Taneja in Talks With India on Building Regional Jet

Mahindra & Mahindra Ltd. (MM) and Taneja Aerospace & Aviation Ltd. (TAA) are in separate talks with India as the country seeks a partner for a planned regional jet that will spearhead its drive to develop a planemaking industry.

Discussions with state-owned National Aerospace Laboratories are at an early stage and the companies are awaiting more details, Arvind Mehra, chief executive officer of Mahindra Aerospace Pvt., and S.M. Kapoor, the head of Taneja’s plane-making facility, said in interviews. Shyam Chetty, the head of plane designer National Aerospace, didn’t reply to e- mailed questions yesterday.

“If it makes economic sense, we would like to be a partner,” Mahindra’s Mehra said. “But ultimately we still have to get a lot of information.”

NAL last year announced the 40 billion-rupee ($788 million) plan to develop a 90-seat aircraft as the country joins China in trying to form a globally competitive aerospace industry. The Indian plane, China’s ARJ-21 and an in-development Mitsubishi Heavy Industries Ltd. aircraft will all compete against Bombardier Inc. (BBD/B) and Embraer SA (EMBR3) models.

NAL expected to get government approval for the regional- jet plan early this year, A.R. Upadhya, its then-director, said in February 2011. Development and certification will probably take about six years, he said then.

“There is a case for India to create an indigenous aircraft industry,” said Harsh Vardhan, chairman of Starair Consulting, a New Delhi-based industry consultant. “We are one of the fastest growing aviation markets, we need an aircraft that suits Indian conditions.”

China Jet

China’s ARJ-21 is running at least four years late. The plane, built by Commercial Aircraft Corp. of China Ltd., began its final flight-test certification program in February. Commercial services were due to begin as early as 2007. Comac is also working on the 168-seat C919, which will compete with Boeing Co. (BA) and Airbus SAS planes.

Mahindra, India’s biggest maker of sport-utility vehicles, bought two Australian aerospace companies in 2009 as it pushed into making planes. The Mumbai-based group makes light aircraft, as well as parts for Boeing 737s, Gulfstream Aerospace Corp. business jets and Lockheed Martin Corp.’s F-35 Joint Strike Fighters, according to its website.

Taneja, based in Tamil Nadu, southern India, makes light planes. It is India’s only private company to have locally developed a certified aircraft, according to its website.

To contact the reporters on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net; Siddharth Philip in Mumbai at sphilip3@bloomberg.net

To contact the editors responsible for this story: Neil Denslow at ndenslow@bloomberg.net; Young-Sam Cho at ycho2@bloomberg.net

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