Boeing, Airbus raise Indias 20-year outlook

Written by fe Bureau | Hyderabad/Mumbai | Updated: Mar 14 2014, 16:16pm hrs
The worlds two largest aircraft makers, Boeing and Airbus, have raised the 20-year market forecast for India by 10 to 20% citing rising demand for air travel on the back of economic growth and favourable demographics.

At the ongoing India Aviation 2014 aircraft exhibition, US-based Boeing said that it sees demand for 1,600 new airplanes in the country worth $205 billion by 2032 that will help connect underserved and remote areas of the country and support the countrys long-term economic growth trajectory. Last time, in the 2012 edition of the air show, Boeing had given a projection of 1,450 new aircraft purchases by 2032.

Dinesh A Keskar, senior VP of sales for Asia-Pacific & India sales at Boeing Commercial Airplanes said, Indias demographics are highly favourable to the growth of air transportation. The share of Indias population entering the workforce is growing. India could have the worlds fourth-largest economy if current trends continue.

Boeing on Wednesday announced a fresh order of 42 737 Max aircraft from low-cost carrier SpiceJet for $4.4 billion first major order for the company from India since 2010. Boeing, a leader in the wide-body long distance segment, is also in talks with both Air India and Jet Airways for more orders of the same aircraft, though nothing is confirmed yet, Keskar said.

At present, Boeing is delivering 10 787-9 Dreamliners to Jet Airways, apart from 13 Dreamliners and three 777s to Air India.

European multinational Airbus also said that India needs 1,290 aircraft worth $190 billion in next 20 years, an increase from its previous projection of 1,042 aircraft by the same time.

Kiran Rao, EVP, strategy & marketing at Airbus SAS said, By 2032, the number of Indian cities with more than a million passengers will have grown to 13 from 2 today. As more people fly and first-time flyers increase, India will be one of the largest markets in the world.

A leader in single-aisle, shorter distance planes, Airbus A320s currently make up the entire fleet of market leader IndiGo and GoAir. Currently, Airbus has a order backlog of around 300 planes, which includes 169 A320s for IndiGo and 74 A320s for GoAir. India is a strategic country for Airbus. We expect a 10% average growth between 2012 and 2022 and 7.2% from 2022 to 2032. Trips per capita will quintiple in next 20 years, said Joost van der Heijden, marketing head (Asia) for Airbus.

However, Boeings Keskar warned that capacity discipline is a problem with Indian carriers. In 2013, revenue paying passengers have grown by only 3.5% while the capacity increase has been 11.5%. Nearly a third of the additional capacity has flown empty.