What is your assessment on Indian civil aviation business for 2015? What were the high points and the low points?
Boeing continues to remain bullish in our outlook for the commercial aviation market in India. Potential for travel growth in India is very high, as the overall economy continues to develop and the middle class continues to grow.
The continued rise of the Low Cost Carriers (LCCs) as well as a return to profitability for several of India’s major airlines due to lower fuel prices, are also contributing factors to this growth. Airlines however will need to continue to watch jet fuel prices, the exchange rate and their capacity and pricing discipline in order to run their operations profitably in the future.
What are the estimates of the airplane sales for the next few years — both in single aisle and wide body categories?
Boeing’s 2015 current market outlook forecasts that airlines in India will need new 1,740 airplanes, valued at USD 240 billion, over the next 20 years. The majority of the demand (1,460 airplanes) will be for single-aisle airplanes, such as the Next-Generation 737 and the new 737 MAX. Demand for wide-body airplanes, such as the 787 Dreamliner family, 777 and the new 777X, is forecast to be 260 airplanes, with the remaining 20 airplanes in our outlook, to be for small (90 seats or below) regional jets.
Tell us about 737 MAX, 777X and newer versions of 787; and how do you estimate their sales in India in the next few years?
Boeing offers the most comprehensive family of airplanes which provide India’s airlines with superior efficiency and economics, allowing them to prosper.
The majority of the demand in India over the next two decades will be for single-aisle airplanes, such as the Next-Generation 737 and the new 737 MAX. The 737 MAX builds on the success of the Next-Generation 737 and incorporates the latest technology CFM International LEAP-1B engines, Advanced Technology winglets and the other improvements to deliver the highest efficiency, reliability and passenger comfort in the single-aisle market.
For wide-body airplanes, the new 777X builds off of the success of the 777 and will be the largest and most-efficient twin engine jet in the world with 12 per cent lower fuel consumption and 10 per cent lower operating costs than the competition.
The 787 Dreamliner family is delivering unmatched fuel efficiency and passenger experience to our customers, keeping them competitive in this challenging economic environment. Since entering service in 2011, the 787 Dreamliner family has flown more than 370 routes worldwide and has established more than 90 new nonstop routes around the world, including Toronto-Delhi.
What are the major challenges while doing business here in India?
In the last 18 months policies that are growth oriented have been implemented by the government. Prime Minister Narendra Modi has initiated a host of reforms in the right direction such as the ‘Make in India’ initiative, ‘Digital India’ etc. However, the government needs to move towards a carefully considered but liberalised FDI regime. This shall be welcomed by the industry and shall serve to be a catalyst for domestic manufacturing.
How do you support government’s ‘Make in India’ initiatives?
Boeing has played a significant role in developing India’s aerospace and defense sector for more than 20 years through integrating Indian companies in our global supply chain, so we welcome the Prime Minister’s vision. Boeing continue to increase its presence, and our strategies are aimed at helping Indian partners build a strong manufacturing infrastructure. Boeing has been building long-term partnerships with Indian companies that are helping create the indigenous aerospace and defence infrastructure envisioned through ‘Make in India.’ Boeing sourcing from India has more than doubled since ‘Make in India’ was launched in September 2014. By 2020, Boeing hopes to increase it by four times the 2014 level.
Our Partnering for Success effort has grown to include 18 direct Indian suppliers, with whom Boeing is working to reduce costs and improve first-time quality and component reliability. Boeing recently held an important supplier summit in Hyderabad to increase awareness and discuss the way forward for competitive global aerospace manufacturing in India, and gathered more than 100 manufacturing entities and suppliers, and close to 100 global subject matter-experts from Boeing, its leadership and our tier-1 supplier partners.