Canadian aircraft maker Bombardier is eyeing the regional expansion in India’s growing commercial aviation sector. The company is optimistic about the demand for small aircraft in the region.
The Canadian company offers three types of aircraft: the 70-80 seater Q400 turboprops, the 60-99 seater medium-haul CRJ jets and the mainline 100-149 seater C-series jets, set to take to the skies this month. Torbjorn Karlsson , Vice-President, Sales, Asia Pacific, spoke to Business Line about the growth potential of the Indian aviation sector and the company’s future plans.
How important is the India market for Bombardier?
India is one of the largest individual markets in the world. Our Q400 aircraft and CRJ and the new C-series aircraft have got tremendous potential in the region. For India, our 20-year forecast is that there will be a demand of about 640 aircraft in the 80-160 seater category. It is a significant market. This will be very much driven by the growth in Tier-II and Tier-III cities.
The Indian market is also changing a little bit. If you look back to 18 and 24 months ago, it was largely focused on the capital cities. Everyone was trying to figuring out how to connect Delhi and Mumbai. But these markets are getting saturated now. India as a market is now shifting to more Tier-II and Tier-III cities and also focusing on cross-border connections. SpiceJet is making some interesting decisions by connecting to Afghanistan and the Saudi region.
India is also the single largest turboprop market, outside Europe. As a single-country market, India has the highest demand for turboprops for Bombardier. China has become less of a turboprop market and is more a market for jets. In India we have two customers. Air India has four of our CRJ-700 aircraft. SpiceJet flies 15 Q400 NextGen turboprop aircraft and has orders for 15 more aircraft in the pipeline.
The market-place is shifting and transforming in opportunities. The Jet-Etihad deal will change the competitive landscape. As a result of these changes, airlines in India are examining their fleets. That, of course, is good news for us.
Are you talking to other carriers in India for aircraft orders? What kind of aircraft orders are you expecting from India in the next two years?
We do not give forecasts for aircraft sales in the short term. But, yes, we are constantly talking to all the carriers in India. IndiGo has publicly stated they are looking at turboprops. We have a broad fleet. Between the Q, CRJ and C series, we have a product that will suit every airline segment.
The Indian government is encouraging airlines to connect to the smaller cities. Do you think you would be one of the biggest beneficiaries of this?
We are working closely with the Civil Aviation Authority in India and the Indian government. They have asked for our inputs on how to stimulate traffic. India needs better connectivity and infrastructure like roads. A decade ago, flying was seen as something you did only if you had money. Now, the Indian government has realised the importance of connecting cities. In such a scenario, turboprop aircraft, particularly, will have an important role.
The Q400 is right for India due to its speed for very short duration flights (45 minutes to one-and-a-half hours).
Apart from the domestic sector, we see good potential for connecting Tier-II and Tier-III cities to regions such as Bangladesh, the Middle-East, Thailand and Myanmar. Our CRJ and C series aircraft have good potential in the region. These aircraft are about doing more frequencies in a cost-effective way.
Does it worry you when airlines like Air Asia say that they don’t need smaller aircraft?
No, it does not. Every transport market needs different solutions for the segments. So, when someone says they will only do 180-seater aircraft, it is their choice. But that’s not the entire market.
What challenges do you foresee in India?
When we look at the 20-year growth forecast, one of the biggest challenges is infrastructure development and investments. It must be accepted that investing in aviation is not an ‘either-or’. The infrastructure has to be built at the right pace.
To promote air travel, you also need to streamline taxes and security and look at air travel as a cost effective way of transport. Incentives on fuel and landing fees will stimulate growth in smaller cities.