Boeing ups India projections

The oil crisis may have forced Indian airlines to drastically prune their flights and fleet usage, but US aircraft major Boeing has upped its projection of aircraft requirement here for the next two decades. On Tuesday, Boeing released its 20-year current market outlook (CMO) which estimates India would need 1,001 new commercial planes worth $105 billion.This is almost 10% higher than last year’s CMO that said the country would need 911 planes worth $86 billion. Explaining the increased projection at such a time, Boeing’s senior VP (sales) Dinesh Keskar said: ‘‘Our forecast is not for the next year but next two decades. India’s 20-year GDP growth forecast is an average of 6.7%, the second highest in the world for large-GDP nations only after China. This will reflect in our CMO.’’ Out of the projected demand for 1,001 new planes, 880 will be additional requirement. Of the fleet strength of 324 in 2007, it will phase out 121 planes and need as many to replace them. In all, Boeing estimates 1,204 commercial planes would be flying in the country by 2027 — a quadruple growth in two decades. From last year’s CMO, the biggest growth in projected demand is in the below 200-seater single aisle planes like those of Boeing 737 or A-320 family, signalling Indian carriers airlines may like to increase frequencies on domestic routes.But with oil prices remaining high and airlines bleeding heavily, will this bullish outlook hold good? ‘‘These short-term losses are an opportunity to remove the overcapacity that is not allowing airlines to charge fares that can ever recover their costs. For instance, the break even fare of a full service carrier on Delhi-Mumbai route is about $154 but the typical total fare actually charged is about $121.Once capacity offered is closer to demand, fares will be closer to break even points,’’ he added. The US major expects the current problems to be sorted out in the next 12 to 18 months. It feels crude is unlikely to cross the $150 per barrel mark. The bullishness on Indian growth story perhaps stems from the fact that the average number of air trips a person makes is not more than two per year.Given a huge population base, even a slight increase in this figure with growing prosperity is expected to fuel the demand for 1,001 new planes over the next two decades.Meanwhile on the delayed Boeing 787-Dreamliner programme, Keskar said Air India could get the first plane in last quarter of next year. Jet Airways, whose deliveries were to begin in 2011, is yet to get a tentative date as the airline is planning to change the version of 787 it had originally ordered to get a bigger variety.‘‘AI will get compensated for the delay as per the agreement,’’ Keskar said.

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