Mr Anand Mahindra's aerospace arm could be unfurling with its small planes what Captain Gopinath achieved with his dream low-cost airline concept last decade: open up connectivity with the hinterland.

In Bangalore on Thursday, the Vice-Chairman and Managing Director of Mahindra & Mahindra spoke passionately about the non-urban hunger to connect and how his soon-to-be-launched small aircraft, two to 20-seaters, would drive up rural and India's growth.

The company is looking at selling or lease-financing between 30 and 100 aircraft across its portfolio of five a year in the next 3-5 years, its top officials said.

In the past two years the group has budgeted an initial Rs 450-500 crore into Mahindra Aerospace and is starting with three types planes from its Australian acquisition, Gippsland Aerospace, and a 285-crore greenfield manufacturing facility that would be operational by 2013 at Narsapur, 40 km from Bangalore. It will also add the NM5 five-seater being developed with NAL to bring rural people closer to their markets, tourist destinations and in emergencies, Mr Mahindra said at the Founder's Day speech and a news conference later at NAL.

"There is enormous potential for aircraft of 2- 20 seat that are rugged reliable and affordable. The vision is to open up the country to dramatically improve connectivity in India. Most of the commercial airlines are focussing on urban connectivity. What we believe is that if India wants to maintain and sustain its economic growth momentum then it is going to have to open up the hinterland.

The planes will rival the small number of Cessnas and Beechcraft planes that now fly in the country.

The growing rural consumption was propelling demands for connectivity of all kinds, and air connectivity was a critical component in maintaining India's growth rate, he said.

According to Mr Hemant Luthra, President - Systech and member of the group executive board, "From the family of Mahindra Aerospace planes that include the NM5, we would be disappointed if in 3-5 years' time we were not clocking a rate of 100 aircraft per annum in India. This rate could get accelerated if we include exports to China and other countries."

The first of the two NM5 prototypes would be flown in Australia hopefully by Diwali. The Indian prototype would be tested by mid-2012, said Dr A.R.Upadhya, NAL's Director.

Mr Luthra said price-wise the planes would compare with a Ferrari and be the 30-35 per cent costlier than an AC car in terms of cost per seat mile. The demand for the planes is phenomenal, he said citing an earlier AT Kearney study done for the company.

Mahindra Aerospace has also shown interest in working with NAL on its MAV (micro air vehicle) programme. The MAV, a light, 30-cm and 250-g bird-sized air vehicle can be hand-operated and can fly for half an hour on surveillance/observation missions.

Dr Upadhya said NAL was testing it through the Amritsar police and had offered it the Karnataka Disaster cell to map or monitor the mines. A demonstration would be made in the coming days.

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