Boe­ing Raises Fore­cast for New Air­planes,

Glob­ally and for In­dia

India Strategic - - CONTENTS - By Gul­shan Luthra

LE BOUR­GET. In­dia fig­ures high once again in Boe­ing's fore­cast for com­mer­cial air­planes for the next 20 years. Al­though spe­cific fig­ures for In­dia will be an­nounced in New Delhi July-end, Dr Di­nesh A Keskar, Se­nior Vice Pres­i­dent Sales, Asia Pa­cific & In­dia, told In­dia Strate­gic in an in­ter­view that while the global fore­cast in­di­cates a 3.6 per­cent in­crease over the 2016 fore­cast, the rel­a­tive fig­ure for In­dia “will go up a lit­tle more than that,” the rea­son be­ing that In­dia is still in the early stages of civil avi­a­tion devel­op­ment and “three out of four pas­sen­gers in In­dia use Low Cost Car­ri­ers (LCCs)” whose strength is grad­u­ally grow­ing.

In his first fore­cast in 2003, Mr Keskar re­called, he had an­nounced a pro­jec­tion of 400. There were no low cost car­ri­ers then like the Spice Jet, Go Air etc. “The in­dus­try was dif­fer­ent then, and now it has changed.” Even now though, less than five per cent of In­di­ans fly and with the open­ing of new re­gional air­ports, the num­ber of air pas­sen­gers is bound to in­crease.

He was sure the fig­ure for In­dian air pas­sen­gers would also cross 100 mil­lion in 2017. It was close to that in 2016, but did not ex­ceed that.

Mr Keskar in­di­cated that the fore­cast now should in­clude more than 1,800 air­planes worth about $265 bil­lion. He was happy, he said, that SpiceJet had or­dered about 155 Boe­ing 737 Max air­craft, some­thing which had been men­tioned by way of thanks even by US Pres­i­dent Don­ald Trump to Mr Naren­dra Modi dur­ing the In­dian Prime Min­is­ter's of­fi­cial visit re­cently to Washington DC.

Mr Keskar, who is also the com­pany's Vice Pres­i­dent Sales for Asia Pa­cific, drew at­ten­tion to the trend for smaller air­craft like the 737 vari­ants due to the ex­pan­sion of LCCs, and say­ing In­dia was rightly poised for growth in this sec­tor.

Mr Keskar said that Boe­ing's new Dream­liner 787-10, which has just been dis­played here, should be a good buy in fuel econ­omy and profit mar­gins per seat for air­lines in In­dia and else­where. While Air In­dia is al­ready op­er­at­ing the Dream­liner for the last few years, Jet Air­ways has now or­dered it and there are also dis­cus­sions with Vis­tara.

Sin­ga­pore Air­lines, which partly owns Vis­tara, al­ready flies the 787s, and has also or­dered the new 787-10 vari­ant. "So, it is log­i­cal for Vis­tara to come on board this air­craft,"

No­tably, the over­all global fig­ure, an­nounced by Boe­ing at Le Bour­get, the venue of the Paris Air Show, pro­jected a de­mand for 41,030 for

var­i­ous types of new jet air­planes over the next 20 years val­ued at $6.1 tril­lion. The com­pany re­leased its an­nual Cur­rent Mar­ket Out­look (CMO), say­ing that it es­ti­mated an in­crease of 3.6 per cent com­pared to its es­ti­mate in 2016.

Boe­ing Vice Pres­i­dent Mar­ket­ing for Randy Tin­seth ob­served that "Pas­sen­ger traf­fic has been very strong so far this year, and we ex­pect to see it grow 4.7 per cent each year over the next two decades," ad­ding "the mar­ket is es­pe­cially hun­gry for sin­gle-aisle air­planes as more peo­ple start trav­el­ing by air."

The sin­gle-aisle seg­ment will see the most growth over the fore­cast, fueled by low- cost car­ri­ers and emerg­ing mar­kets. 29,530 new air­planes will be needed in this seg­ment, an in­crease of al­most 5 per cent over last year.

The fore­cast for the wide­body seg­ment in­cludes 9,130 air­planes, with a large wave of po­ten­tial re­place­ment de­mand be­gin­ning early in the next decade. With more air­lines shift­ing to small and medium/large wide­body air­planes like the 787 and 777X, the pri­mary de­mand for very large air­planes go­ing for­ward will be in the cargo mar­ket. Boe­ing projects the need for 920 new pro­duc­tion wide­body freighters over the fore­cast pe­riod.

The Asia mar­ket, in­clud­ing China, will con­tinue to lead the way in to­tal air­plane de­liv­er­ies over the next two decades. World­wide, 57 per­cent of the new de­liv­er­ies will be for air­line growth, while 43 per­cent will be for re­place­ment of older air­planes with new, more fuel ef­fi­cient jets.

Dr Di­nesh A Keskar, Se­nior Vice Pres­i­dent Sales, Asia Pa­cific & In­dia

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