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Is Indian aviation in a turnaround phase?

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Dinesh Keskar

The delivery of Air India’s first Boeing 787 Dreamliner recently coincided with the release of Boeing’s 2012 India Current Market Outlook. Despite the prevalent gloom in the sector, there is positive long-term growth forecasts for the Indian aviation industry. “India is looking at 1450 airplanes in the next 20 years at a cost of US$ 175 billion. Of these 1201 will be single aisle (83 per cent), followed by twin aisle (234 in number, 16 per cent),” stated Dinesh Keskar, senior vice president, sales Asia-Pacific and India, Boeing Commercial Airplanes. Interestingly, he did not predict any significant growth in the regional airline sector.

The 20 year outlook for India represents 4.3 per cent of the total world market. “The state of Indian aviation industry might not be the best but there has been a slight improvement. In Q1 FY13 Jet Airways and SpiceJet have shown profit. While the number of flights have gone down due to Kingfisher capacity cuts, the overall picture is positive. Airlines like IndiGo and SpiceJet have increased significant capacity. We think that the LCC seat share has stabilised,” stated Keskar adding that two-third of airline passengers in India will fly LCC and that data will not change for sometime.

Worldwide airlines will need 34,000 new airplanes valued at US$ 4.5 trillion. “In the past the most dominant market was the US and Europe, now APAC is the future. In fact 35-38 per cent of these airplanes will go to APAC. Forty-nine per cent of the older and less efficient planes will be replaced by newer and more efficient ones,” remarked Keskar. By 2021 India will be the fifth largest economy in the world and by 2031 the fourth largest. “India’s domestic air services have increased dramatically in terms of traffic – by almost 211 per cent. India’s airlines have experienced rapid traffic and capacity growth since 2001. Traffic to and from South Asia is forecast to be the highest in the world, bigger than even the US and China,” he pointed out.

Keskar also spoke about the induction of Dreamliner 787 and the next generation technology of the aircraft. He asserted that so far the new 787 innovations have worked well, and 19 aircraft have been delivered to four customers.

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