As the aviation sector is in a revival mode with airlines balancing capacity with growth, Seattle-based aircraft manufacturer Boeing is bullish on India sales, with no deferment or cancellation of aircraft orders from India expected this year. The company has flag carrier Air India, private carrier Jet Airways and low-cost SpiceJet as its customers, with a total order size of nearly $15 billion (around Rs 70,500 crore) for close to 100 aircraft.
Dinesh Keskar, president, Boeing International Corporation (India), had recently told media persons, ?By the start of the next fiscal (FY10-11), there are good break-even chances for the domestic carriers in India,? adding that stabilising jet fuel prices, growth in economy, rational ticket pricing and cutting excess capacities will help the carriers return to profitability.
Explaining why Boeing is upbeat on its customer loyalty in India, Kiran Yadav, aviation analyst and director of Aerobiz International, said, ?Aviation is a cyclical business with every slump followed by growth. Hence, after a tumultuous 2009, there are indications of recovery in the sector in terms oil crude oil stabilising in the medium term at $50 a barrel, lower operating cost and increase in passenger traffic. Also, 2009 has been a learning curve for airline operators who have matured by adopting smart business models. Though the sector is in the red, airlines are constantly adopting newer strategies which will pay off dividends in the future.?
Data available on the Directorate General of Civil Aviation (DGCA) website indicates that airlines have started adding capacity since July 2009 which is 30% more than 2008.
AI alone has placed an order of 68 aircraft with Boeing in December 2005 valued at $11 billion at list price and deliveries have begun in November 2006. However, in July 2009, AI which was struggling to cope with a financial crunch, had considered cancelling some of the orders it had placed, but later Boeing confirmed that there were no cancellations from AI.
Arvind Jadhav, CMD, Air India said, ?We will receive delivery of three Boeing aircraft in March. AI has been one of the few airlines which will continue to induct new aircraft into its fleet and phase out the older ones.? The carrier plans to use its Boeing aircraft on all long haul routes. With a fleet size of nearly 148 aircraft, the carrier has a huge domestic network.