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Mahindra Aerospace in pact with Viking Air to tap India regional flight demand

Both companies to form strategic alliance

MUMBAI (NewsRise) -- Mahindra Aerospace tied up with Canadian utility aircraft manufacturer Viking Air to jointly cater to the south Asian nation's push to improve connectivity across smaller towns and cities.

Under the partnership, Mahindra Aerospace and Viking will support each other's "non-competing aircraft business to boost market penetration, and provide potential customers with multiple options based on specific operational requirements," the Indian company said in a statement. The pact will allow them to jointly develop regional air transportation solutions, it added. The company, however, didn't immediately clarify if the two would partner to make aircraft in India.

Both the companies signed a memorandum of understanding on Friday to form a strategic alliance during the visit of Canadian Prime Minister Justin Trudeau to India.

"Viking sees enormous market potential for the Series 400 Twin Otter in India, with a particular emphasis on the seaplane variant," said David Curtis, president and chief executive of the Canadian company.

Viking Air manufactures Twin Otter, a 19-passenger aircraft known for its ability to land on rugged terrains, including on dirt runways, water and ice. The Victoria-based company had revived production of the aircraft in 2007 after it shut down operations for almost two decades.

Mahindra builds an eight-seat single-engine utility aircraft -- Mahindra Airvan 8 -- and a 10-seat turbo prop utility aircraft -- Mahindra Airvan 10. The company is set to launch versions of these aircraft that will land on ice and water, it said.

The partnership comes at a time when air traffic in India is surging as rising incomes and the advent of no-frills airlines prompted more people to shun trains for long-distance travel. A sharp fall in fuel prices allowed airlines to drop fares.

In 2016, India became the third-largest aviation market behind the U.S. and China with domestic traffic touching 100 million passengers. The industry is set to grow at an average 15% over the next three years, analysts say.

Meanwhile, the burgeoning traffic has aggravated the congestion at major Indian airports that are already struggling with capacity constraints. Indian carriers, which operate 500 aircraft, have ordered an additional 1,000 planes, per an estimate by HSBC in December.

In a bid to ease congestion at the airports and boost rural aviation, last year India unveiled a program called Regional Connectivity Scheme. The government program makes it cheaper for people to fly within the country by subsidizing a part of the cost for airlines to fly to smaller towns.

Mahindra Aerospace Chairman S.P. Shukla said he expects the joint venture's portfolio of aircraft to address the much-needed requirements of regional connectivity.

--Dhanya Ann Thoppil

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