BOEING’S AMBITIOUS MARKET FORECAST

Year 2016 marks the centennial year of Boeing. Continuing its tradition since 1960s, the company presented the annual Current Market Outlook (CMO) at a press conference in New Delhi. Dinesh Keskar, Senior Vice President, Asia Pacific and India Sales, Boei

Jayant Baranwal (Baranwal): 5/20 has been changed to 0/20, in that view various carriers are going to go for international operations. Which particular make are you focusing on for international and what kind of offer you’ll make to these airlines?

Dinesh Keskar (Keskar): First of all you have to get to the 20 airplanes, which I am sure any airline can get over the time. What is needed to be understood that domestic operations in today’s environment is reasonable to do because, there is little over capacity, very low fuel price and exchange rate is manageable. As things go higher and as more and more airplanes come, then the called capacity, balance may be questionable. So if you put 20 airplanes in domestic there is no guarantee that you will make money.

I think even Vistara has said they will be looking at regional. And parent (Singapore Airlines) of Vistara airlines is a very knowledgeable operator in the world.

Baranwal: Recently Mr Rajeev Choubey, secretary civil aviation spoke about the cost of leasing how do you think it can be brought down?

Keskar: I spoke to the secretary at the Farnborough air show in regards to this issue and had also introduced him to a few companies. Leasing is really a function of cost of capital, we don’t control that also, it is world market that decides what the interest rates are. Though the interest rates are low right now, so cost of leasing at the time being is low, but the cost of leasing is the bottom line, It is the cost of assets and cost of finance.

If it’s the volumes, you may get something or if the country says we will take 50 airplanes that could be a different situa- tion. But if an individual airlines goes and they want for two three airplanes the cost will be high. At the end of the day there is limit to the cost of the assets and the cost of typically what the term and how long you can take longer lease that can reduce the cost.

Baranwal: Spicejet is going to have the expansion of worth about 12 billion dollar. What kind of offers are there from Boeing’s side?

Keskar: Spicejet has the MAX on orders as you know, they already know what that airplane is. What they are looking at is a volume buy and what kind of deal would it be, we are in talks with them, we met at Farnborough and when the timing is right we will decide what to do.

Baranwal: At the occasion of 100 years of Boeing what is the best moment of BCA and what is the worst moment of BCA?

Keskar: I have been here only for 36 years, so I cannot comment on the first 64 years of operations. But I think the best moment for BCA would be, when we launched the 777 and we delivered on time and it started the ETOPS from day one. That shows the technological marvels that Boeing engineers are capable of doing and we continue to do so innovation is in our blood. The worst moment would be the delay in 787 we caused the customer because in my 36 years that’s the only time we didn’t deliver the airplane on time.