American aircraft manufacturer Boeing has revised its sales forecast for passenger planes in India due to the high operational costs, depreciating rupee value and mounting debt. Boeing’s Current Market Outlook (CMO) 2012 for India estimates that India will need 1,450 new aircrafts worth US$175 billion by 2031. In 2011, Boeing had forecasted demand at 1,320 planes up to 2030, worth US$150 billion. However, the biggest demand for airlines in India continues to be for single-aisle airplanes (1,201), followed by twin-aisle (234) and regional jets (15). He revealed that India will have the highest growing air passenger traffic in the world, which is currently growing at 8.4 per cent annually.
“India is projected to have the highest traffic growth rate in the world over the next 20 years, exceeding even that of China,” Dinesh Keskar, Senior Vice President of Sales – Asia Pacific and India, Boeing Commercial Airplanes said in New Delhi while releasing the CMO. He revealed that over 60 million passengers would fly within India this year. “Over the next 20 years, the forecast passenger growth is expected to be driven by an underlying economy with long-term growth projection of twice the world average and supported by the continued economic prosperity amongst a growing segment of the large Indian population, higher discretionary incomes, business progress and easier airport access,” he added.
Keskar also said that airlines in India are improving their financial performance due to improved yields and capacity management, although slowing GDP growth, high fuel prices, and a weak rupee could affect profitability and growth in the near term. “Jet fuel in India costs nearly 50 per cent more than the global average, while the local currency has depreciated more than 30 per cent since January 2008,” he said. Keskar further added that three Boeing 787 Dreamliners have been flight tested by Air India’s pilots and ready for delivery.
Keskar also talked about the latest status of development of Maintenance, Repair and Overhaul (MRO) facility in Nagpur. “The construction work at the MRO facility will be completed by December 2012. After equipment and machinery is installed, it will be operational by the second quarter of 2013 subject to DGCA clearance,” Keskar said. The MRO is part of an agreement between Air India and Boeing following an order for 737 and 787 Dreamliners which were placed by Air India in January 2006. “The MRO is coming up at a total cost of US$100 million and will be handed over to Air India once it’s completed,” he added.