India will need 2,380 new commercial airplanes, valued at US$330 billion, to handle the growing demand for air travel over the next 20 years, as per Boeing’s annual India Commercial Market Outlook (CMO).
Speaking about the India market, Darren Hulst, Deputy Vice President, Commercial Marketing, The Boeing Company, said, “India will be amongst the world leaders in aviation sector in the coming years. Over 200 million households will be above US$ 20,000 income by 2035; this rise in middle class is the key for growth. Indian economy will grow by five times in next 30 years and by 2045, India will be the third largest economy. Over 9.2 per cent of Indian GDP is driven by the travel and tourism segment. India is the fastest growing aviation market with a delivery demand of 2,380 aircrafts and a traffic demand of close to eight per cent.”
Globally, aviation sector has maintained a steady growth and Asia has been the centre of growth. Overall, airlines will need 44,000 new aircrafts in the next 20 years with 32,420 single aisle; 2,240 regular jets and 1,040 freighters. Last year, the global fleet size was 28,830 which will almost double in 2028 at 50,660, with half of the aircrafts being used for growth, and rest to replace the existing fleet.
“20 years ago, the concentration of flights was in the North America and Western Europe. Today, Asia market has evolved drastically. Last year, the size has doubled to 110,000 flights per day in Asia. Today, around 12 million passengers board an aircraft every day. In 1988, 1.1 billion passengers travelled by air, in 2019 this number has grown to 2.6 billion. Almost 300 million passengers are added each year. Aviation adds US$ 2.7 trillion to the global economy, supports 65.5 million jobs and 3.6 per cent of the global GDP. The aviation market is resilient, sustainable and productive. Despite global slowdown and slow growth, aviation has grown strongly,” Hulst added.
In India, Boeing serves to Spice Jet, Air India, Vistara, and Jet Airways. Out of the demand of 2,380 planes, the Indian fleet basically consists of large requirement for further growth. Close to 79 per cent of the fleet is for growth and expansion and 20 per cent is for replacement.
Speaking about Jet Airways being grounded and further confirmed orders, Salil Gupte, President, Boeing India said, “Current confirmed orders from India market is for 205, B737 Max aircrafts and six B787-9 aircrafts. Jet Airways going down is a big loss as it was a very important customer for us. But as of now, all our contractual agreements with Jet Airways remain in place. India is the biggest investment for Boeing outside USA in the future. We are committed to the India market and the investment in the eco-system will be continuous.”
One of the interesting insight and a big opportunity to the Indian aviation industry is that currently India serves to only 35 per cent of the overall outbound capacities from India. “Indian carriers are in a very unique place for future. Out of the overall outbound traffic from India, only 35 per cent capacities are served by Indian carriers. Also on the India-Europe routes, only 37 per cent of the traffic is served by Indian carriers, rest of the business is done by foreign carriers. Hence, there is a huge scope and opportunity for the Indian carriers,” Hulst revealed.
Also, the domestic market has tripled in last 10 years and has almost doubled in last four years. In India, the airports served in 2008 were 81 which have grown by 37 per cent in 2018 with a total of 111 airports served.