With Indigo already in profit and Jet and Spicejet turning profitable, aircraft maker Boeing has upgraded its outlook for the Indian aviation market.
Boeing also projects India to show the highest air traffic growth in the world over the next 20 years.
“Over 60 million passengers will fly within India this year. Over the next 20 years, the forecast passenger growth is expected to be driven by an underlying economy with a 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 income, business progress and easier access to airports,” Dinesh Keshkar, Senior Vice-President (Sales, Asia Pacific and India) said.
Risk factors
Releasing Boeing’s Current Market Outlook, Keskar said that airlines in India are improving their financial performance due to improved capacity management.
However, slowing GDP growth, accompanied by high fuel prices and a weak rupee continue to pose risk. “When you look at the market, despite some of the challenges, India will continue to have one of the strongest, most vibrant markets in the world,” Keskar added.
Where is the growth potential? Boeing answers that air trips per person per year is just 0.01, while in China it is 0.10 and in USA it is 1. At the same time, India’s economy is expected to grow faster than world and even the Asia Pacifc region during next 20 years.
Interestingly, the US based aircraft maker feels there is not much scope for bigger aircraft such as B747 or A380. That is why, it estimates that from now till 2031, not a single bigger aircraft is expected to be delivered. Kingfisher has ordered for A380s and despite its deteriorating financial situation, it has yet to cancel its order.
Air India (including Air India Express), Jet Airways, JetKonnect, Indigo, Spicejet, Go and Kingfisher are the scheduled airline operators in India.
These airlines together have 333 aircraft (as on June 15, 2012). These scheduled airlines carried a total of 3.54 crore domestic passengers during January-July — a growth of 1.74 per cent, according to data complied by the Directorate General of Civil Aviation .