Boeing And Airbus Eye Indian Growth

March 17, 2016

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Boeing and Airbus say they expect Indian carriers to order up to 1740 aircraft over the next 20 years, as manufacturers eye one of the world's fastest-growing aviation markets to offset any weaker sales elsewhere.

Boeing said falling fuel prices, increasing numbers of Indians wealthy enough to travel by air and improved airport infrastructure would boost orders.

The company expects airlines to buy 1740 planes worth USD$240 billion by 2034, its senior vice president for Asia-Pacific and India sales, Dinesh Keskar, said at an event at this week's Indian Aviation airshow in the southern city of Hyderabad.

Airbus, at the same event, said it forecasts India will require more than 1,600 passenger and freight aircraft, three-quarters of them narrow-body jets, over the next 20 years, offering USD$224 billion worth of business.

Aircraft executives are looking to India to support sales after global economic uncertainty overshadowed recent aviation shows in Singapore and Dubai, raising concerns about a slowdown in orders.

However, plane makers meeting in Singapore last month defied the industry's growing number of doubters, saying an unprecedented expansion in the aerospace industry is into its eighth year, supported recently by low oil prices.

BUDGET AIRLINES

Indian budget carrier SpiceJet is in talks with Airbus and Boeing to buy about 100 planes, worth about USD$11 billion at list prices, but has yet to complete the order.

Boeing is keen to clinch the order to keep a foothold in the low-cost Indian carrier market, while a win for Airbus would cement its position as the country's dominant supplier of narrow-body planes.

"Airbus is being very aggressive and I don't blame them. We have a relationship with SpiceJet that dates back to 2002. We have worked with them in good and bad times," said Boeing's Keskar.

IndiGo ordered 250 A320neos in August, handing Airbus its largest-ever order by number of planes. Other airlines are also looking to grow their fleets to win more of what is expected to become the world's third-largest aviation market by 2026.

The number of Indian passengers has jumped more than 20 percent in the past year. India's biggest airlines including SpiceJet, Jet Airways, IndiGo and GoAir, largely money-losing until this year, are now profitable as the outlook for the market improves.

"We are confident about the India forecast because of economic growth, middle class growth and airlines are doing well. There is a relatively low number of aircraft compared to other emerging markets," Airbus' Head of Marketing in Asia Joost Van Der Heijden told reporters in Hyderabad.

(Reuters)