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Home » News » Business » India may need 1850 new planes worth $250 bn in 20 yrs on policy boost
India may need 1850 new planes worth $250 bn in 20 yrs on policy boost

India may need 1850 new planes worth $250 bn in 20 yrs on policy boost

Boeing Co said on Tuesday it expects Indian airlines to order 1,850 new aircraft worth $265 billion over the next 20 years, up from an earlier forecast, thanks to the new aviation rules that the manufacturer said will boost demand.

In March, the company had projected that demand from India would add up to orders for 1,740 planes over 20 years.

“India continues to have a strong commercial aerospace market and the highest domestic traffic growth in the world,” said Dinesh Keskar, senior vice president, Asia Pacific and India sales at Boeing Commercial Airplanes.

“With the new aviation policies in place, we even see greater opportunities, and remain confident in the market and airlines sector in India,” Keskar said adding “Lower fuel prices, economic expansion, competitive fares and rising incomes of the large middle class are helping boost air-travel demand.”

Keskar also commented on the government’s regional connectivity push, saying even as it has capped prices, the promise of refunding 80 per cent of losses, if any, will help the airlines drive the business.

Last month, India overhauled rules governing its aviation industry, liberalising norms for domestic carriers to fly overseas and spreading the country’s air travel boom to smaller cities by capping airfares and opening new airports.

Boeing said in an email that it forecasts single-aisle planes, such as the next generation 737 and 737 Max, to make up the bulk of new deliveries, with India likely to need about 1,560 such aircraft.

Speaking to reporters, Keskar said regional jets with 10-seater capacity will constitute 90 units out of the total demand, or around $1 billion in

This will make India contributing to over 4.6 percent of the global demand for 39,620 airplanes by 2035, and 4.5 percent of world demand in terms of value, Keskar said, adding these new planes will continue to support growth of low-cost carriers and replace older ones.

Boeing says it has more than 85 percent share of the wide-body airplane market in India, while competitor Airbus sells the bulk of small planes preferred by low-cost carriers (LCCs) such as InterGlobe Aviation’s IndiGo.

LCCs dominate Indian skies and account for more than 60 percent of the flights in the country.

The upbeat outlook comes after the country’s domestic air traffic grew 18.8 per cent in 2015 to 80 million, which is the fastest in the world, as per the latest IATA numbers.

Domestic carriers like the largest player IndiGo, GoAir and SpiceJet have been ordering new planes in the hope demand will stay strong and the country will become the third-largest civil aviation market in the world after China and the US by 2026.

Earlier this month, low-cost carrier GoAir, which is planning an IPO, ordered 72 A320neo planes from Airbus, while Jet Airways had ordered 75 Boeing 737 Max last November.

IndiGo has placed an order for 240 planes, the largest in aviation history, from Airbus.

While refusing to share its market share in India, Keskar told PTI, “Currently, as many as 240 Boeing planes are in service in the country. We also continue to be the preferred choice for wide-body airplanes here with over 85 percent of the market share.”

Indian air traffic growth remains the highest in the world at 8.6 percent, while domestic passenger traffic jumped 21 percent in 2015 over 2014, which is a record high for global aviation.

Keskar said low-cost carriers account for over 60 percent of all flights in the country and they will continue to do so going forward.


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