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Thursday, 17 January, 2019, 12 : 05 PM [IST]

Boeing raises India forecast to 2,300 new airplanes over 20 years

Record-setting domestic passenger traffic and a robust domestic economy to drive the need for 2,300 new airplanes, valued at USD 320 billion. Newer, more efficient twin-engine airplanes like 777 and 787 enabling new non-stop trans-Pacific routes to spur growth on international long-haul travel. TravelBiz Monitor presents highlights.
Boeing raised its long-term forecast for commercial airplanes in India as unprecedented domestic passenger traffic and rapidly expanding low-cost carriers (LCCs) drive the need for 2,300 new jets – valued at $320 billion – over the next 20 years.

More than 10 million passengers, on average, travelled within India each month.

“To meet this increased domestic air traffic growth, we see the vast majority of available airplane seats coming from LCCs,” said Dinesh Keskar, Senior Vice President, Sales Asia Pacific & India, Boeing Commercial Airplanes. “The success of this market segment will mean more than 80% of all new airplane deliveries in India will be single-aisles. And the superior economics and fuel efficiency of the new 737 MAX airplane will be the perfect choice for Indian carriers.”

According to Boeing’s Commercial Market Outlook (CMO), India’s commercial aviation industry has achieved 50 consecutive months of double-digit growth. This growth is matched in other sectors of the country’s economy and is expected to significantly help grow India’s long-haul international market.

“The Indian economy is projected to grow by nearly 350% over the next two decades to become the third largest economy in the world,” said Keskar. “This will continue to drive the growth of India’s middle class and its propensity to travel both domestically and internationally, resulting in the need for more new fuel-efficient short- and long-haul airplanes.”

The growth potential of any industry is driven partly by technology advances and innovation. The twin engine economics and right-sizing of the 777 and 787 families are continuing to enable airlines to profitably offer nonstop service in transpacific markets that previously relied on larger airplanes like the 747 and required connections via large hubs. Today, non-stop transpacific routes have more than tripled since the 1990s and approximately 80% of these flights are operated on fuel-efficient twin-engine airplanes like the 777 and 787.

With more than 5% of the world’s fleet expected to operate in India by 2037, services will continue to be a major driver of growth in the region’s commercial aviation industry. Commercial services such as flight training, engineering and maintenance, digital analytics among others will provide airlines with optimal operational efficiencies as they continue to expand to meet growth in the marketplace. In the South Asian market, including India, Boeing forecasts a commercial services market valued at $430 billion over the next 20 years.

Domestic travel continues to exhibit stellar growth (however, not profitable)
  • More than 10 million passengers every month in 2018
  • LCC’s now provide 64% of all seats
  • Government spending on airport infrastructure continues to open new routes and new markets
  • Airlines in India face significant headwinds
  • Rise of global fuel prices
  • Strengthening of the US dollar versus the Rupee
  • Low yield environment


India market update
Airlines in India will need 2,300 new airplanes valued at 320 billion US dollars, over the next 20 years
  • India domestic passenger traffic is at highest levels over past 5 years and growing
  • International market traffic is poised to grow rapidly
  • Challenges ahead:
  • Exchange Rate
  • Fuel prices
  • Fare yields
  • Boeing continues to develop new fuel efficient airplanes and market leading services needs of our customers in India
 
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