Financial Daily from THE HINDU group of publications
Tuesday, Apr 19, 2005
Financial Daily from THE HINDU group of publications Tuesday, Apr 19, 2005 |
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Corporate
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Outlook Taneja Aerospace set to turn around after financial rejig K. Giriprakash
Bangalore , April 18 TANEJA Aerospace and Aviation Ltd (TAAL) is set to turn around after undergoing financial restructuring and winning new orders for its light sports aircraft from the US. "We expect to post net profits from 2004-05 onwards," Mr Salil Taneja, Vice-Chairman of TAAL, India's only private aircraft maker, told Business Line. He said the company has won orders from the US-based Indus Aviation for supply of about 25 two-seater light sports aircraft, Thorp. Out of this, four kits of the aircraft have already been despatched and five more will be exported in another month. An additional 15 kits will be exported over a period of 10 months. Each of these aircraft costs about Rs 40 lakh. Mr Taneja said the company had restructured its finances and has retired high cost debt with the interest cost being brought down by 50 per cent. He said these steps should help the company start posting net profits from now onwards. He said Taneja has so far sold 10 P68s and four Cessnas with which it has an exclusive marketing arrangement for India. Mr Taneja said the light sports aircraft market in the US is picking up because it has lesser regulations for flying the aircraft. Hence, Taneja wants to tap the booming market there. He said with more airlines being launched and airlines being permitted to fly to foreign destinations, the demand for pilots will increase. "With these two-seater light sports aircraft, pilots will be able to get initial certification which will help them to get full-fledged licence to fly bigger aircraft," he said. Mr Taneja said the company's manufacturing centre currently has the capacity to make 50 light sports aircraft a year and 12 P68s a year. The P68s are six-seater twin-engine aircraft. He said recent trends indicate a shift in customers' preference towards jets even though they are costlier than turbo props. He said while jets cost between Rs 15 crore and Rs 65 crore, the turbo-props cost between Rs 12 crore and Rs 20 crore. "Jets are more cost-effective even though they are marginally costlier than turbo props," Mr Taneja said. He said the company will soon have night landing facility at its airfield in Hosur, near Bangalore, and will also extend the runway. "The number of private jets has increased at our airfield and, hence, we plan to upgrade the facilities there," Mr Taneja said. TAAL also executes orders from Indian Space Research Organisation, Hindustan Aeronautics Ltd and Aeronautical Development Establishment.
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