American aircraft manufacturer Boeing Co has upgraded its demand forecast for India, the world's fastest-growing aviation market, and now expects airlines here to order as many as 2,100 planes worth $290 billion over the next 20 years.
In its annual Current Market Outlook report, Boeing revised its forecast for aircraft demand upward by 13 per cent, or 250 planes, from the previous year when it had said India would need 1,850 planes in the next two decades.
Indian airlines now have a fleet of 490 planes with 880 on order. The current forecast is sharply higher than what it was in 2005, when Boeing expected Indian airlines to buy 470 planes worth $35 billion over the next 20 years.
''Commercial aerospace demand in India continues to grow at unprecedented rates,'' said Dinesh A. Keskar, senior vice-president, Asia Pacific and India sales, Boeing Commercial Airplanes. ''The increasing number of passengers combined with a strong exchange rate, low fuel prices and high load factors bodes well for India's aviation market, especially for the low-cost carriers.''
Single-aisle airplanes such as Boeing 737 will account for 85 per cent of the expected plane deliveries, Boeing said.
India's domestic air traffic grew 17.7 per cent in May – the highest growth rate globally, according to International Air Transport Association (IATA).
According to its global projections, there will be a demand for 41,030 new planes over the next two decades, with Indian carriers accounting for more than 5 per cent of this.
Keskar was upbeat about the Centre's regional connectivity scheme (RCS) and said Boeing could increase its projection next year depending upon the scheme's progress.
''We expect the RCS to open new routes which will create a market for our Boeing 737 as airlines will upgrade their aircraft on the new routes,''. Keskar said.
Under RCS, the Union government will provide viability gap funding to airlines to fly to and from dormant airports. The airlines need to cap the airfares on half their seats at Rs2,500 for an hour's flight under the scheme.
India's aviation market now has a number of operators including Air India Ltd, InterGlobe Aviation Ltd (IndiGo), SpiceJet Ltd, Jet Airways (India) Ltd, GoAir, Vistara and AirAsia India as well as other regional players.
Nearly 120 million passengers in India will fly in 2017 compared with 100 million last year.
National carrier Air India offers the highest number of seats market and it increased its capacity by 8 per cent as of July from a year ago; IndiGo, which had the second largest capacity increased it by 20 per cent; Jet by 9 per cent; SpiceJet by 25 per cent and GoAir by 20 per cent.
Boeing expects Jet to order more planes to replace its fleet of 90 Boeing planes. The airline has 75 on order which won't be enough to replace and expand in a growth market.
It also expects Air India Express to add more planes but is unsure of Air India's plans. The airline is undergoing a disinvestment process.
Air India is set to get the last planes from its 68-plane $11-billion order made in 2006. It will get three 787 Dreamliners by October and three Boeing 777 long haul jets by early 2018.
SpiceJet and Jet are also set to receive orders Boeing 737 Max from next year.
Keskar said some Boeing planes are also being leased to Indian carriers over the next few months.
Still, the forecast of 2,100 planes could change if there are infrastructure constraints that are already dogging major metro airports. ''You won't get the number if you just can't fly,'' Keskar warned.