Boeing Sees Booming Market for Passenger Airplanes in India

Boeing Sees Booming Market for Passenger Airplanes in India

Growth in passenger travel, strong GDP fueling demand.

India will need 1,320 new passenger airplanes over the next 20 years, as its economy pushes toward double-digit growth, Boeing said in its latest outlook for India's commercial-airplane market.

As economic prosperity spreads to a wider swath of the Indian population, demand for new and replacement airplanes will surge to $150 billion through 2030, according to the Boeing forecast.

"Indian air carriers are becoming profitable and we expect the GDP to maintain its upward trend in the long-term," Boeing India President Dinesh Keskar said last week. "As a result, both the air-travel and air-cargo markets will grow."

Boeing in June said it will increase production of its next-generation 737s, shown here in final assembly in Renton, Wash. Single-aisle airplanes will be in high demand in India, according to Boeing's latest forecast.
Airline revenue and yields are up, Keskar added, but high inflation and volatile fuel prices will play a pivotal role in the health of the industry.

Passenger traffic is expected to grow by 8.1% annually over the long-term, according to Boeing's forecast.

"The economic and air-traffic growth will in turn stimulate demand for a variety of aircraft types," Keskar said.

New airplanes "that can efficiently and profitably fly short and long-haul routes" will be in high demand, Keskar added.

"This demand is driven by growth in developing and emerging cities, demand from low-cost carriers and the need to replace an aging fleet, Keskar explained.

More Flights, Lower Fares

Single-aisle airplanes will be the most sought-after airplanes, according to the forecast.

To keep up with demand, Boeing recently said it will boost production to a record 42 single-aisle 737s per month by the first half of 2014.

India's airlines have been growing rapidly by taking advantage of geography, demographics, airplane technology and well-coordinated growth and investment plans, according to Boeing.

Some carriers, like Air India, also are looking for replacement airplanes as they retire aging and less-efficient jets.

Boeing predicts that India-based airlines also will grow by responding to passenger preference for more flight choices, lower fares and direct access to a wider range of destinations.

Air carriers will focus on offering more flights using more efficient airplanes, instead of significantly larger airplanes.

Globally, Boeing forecasts a $4 trillion market for new aircraft over the next 20 years with a significant increase in deliveries.

The company sees a market for 33,500 new passenger airplanes and freighters between 2011 and 2030.

Passenger traffic is expected to grow at 5.1% annual rate over the long-term and the world fleet is expected to double by 2030, according to Boeing's global forecast.

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