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APRIL 2014 ISSUE

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On a Higher Plane
The Indian airlines market is buzzing with new aircraft acquisitions
 


India Aviation Market

Airbus and Boeing are excited at the prospect of substantial orders across single and twin aisle airplanes from Indian airlines over the next two decades. India’s airlines, however, are struggling to stay afloat in a harsh regulatory environment, and years of accumulated debt coupled with high fuel prices could impact the market for new airplanes.

According to Dr Dinesh Keskar, senior vice president of sales, Asia Pacific and India, Boeing Commercial Airplanes, “India will continue to have one of the strongest, most vibrant aviation markets in the world over the next two decades”. He stressed that “while passenger growth is recovering and we project a healthy aviation industry in the long term, adverse trends of overcapacity, a weak rupee and high fuel prices will affect airline profitability in the near term”.

Boeing contends that while traffic is recovering, growth is currently unprofitable and overcapacity could affect the market. High fuel prices and depreciation of the rupee continue to hurt operators which earn their revenue in Indian currency but have costs such as fuel, lease rentals, spares and maintenance, which are made in dollars.

According to Boeing, India needs 1,600 new airplanes worth USD 205 billion between 2013 and 2032. Single aisle airliners, such as the 737, make up the bulk of this demand with 83 per cent of the market for 1,330 airplanes worth USD 132 billion. Wide body aircraft such as 777 and 787 will account for 15 per cent of the market with 235 aircraft worth USD 72 billion. Regional jets cater for only a miniscule two per cent of demand (35 aircraft).

 
 
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