Boeing hopes to sell 1,850 planes worth $265 bn in India in 20 yrs

20 Jul 2016

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US aircraft manufacturer Boeing Company now estimates that airlines in India would require 1,850 planes, valued at around $265 billion, over the next 20 years against its earlier projection of 1,740 aircraft valued at $240 billion.

Boeing is upbeat on the market outlook in India 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.

Also, domestic carriers like IndiGo, GoAir and SpiceJet have been ordering new planes in the hope that 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.

Boeing Co said it now expects Indian airlines to buy more of its wide-bodied planes, helped in large measure by the government's new civil aviation policy, which would spur more investment in new aircraft.

"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.

The civil aviation ministry last month recast aviation rules and liberalised norms for domestic carriers to fly overseas and incentivising services to smaller towns and new airports and by capping airfares.

Boeing expects 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.

Boeing claims to have more than 85 per cent share of the market for wide-bodied airplanes in India, while competitor Airbus sells the bulk of small planes preferred by low-cost carriers such as IndiGo.

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

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

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.

"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 per cent of the market share."

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