BANGALORE: India’s aviation industry is likely to spend $75 billion (Rs3,30,000 crore) on new aeroplanes in the next 10 years as the total number of aircraft in airline fleets swells to 1,500 from about 250 now, predicted civil aviation minister Praful Patel.
Perhaps not as many, said Dinesh Keskar, Boeing’s senior vice-president for sales, who thought it would take about 20 years to sell what Boeing estimates will be planes worth at least $72 billion (Rs3,16,800 crore).
“But if our estimates are wrong, we would be glad to sell you the extra planes,” Keskar joked with Patel.
Irrespective of the final numbers, this pace of spending would keep India at the top of the list for the fastest growing aviation market in the world, a fact that Patel underscored in his speech at AeroIndia 2007. The show is the country’s largest aerospace gathering.
Patel estimated that India’s cargo fleet would grow to about 500 aircraft in the next decade from the six freighters flying today. He also said that big corporations could buy anywhere between 300 and 400 private jets in the next five years.
India’s aviation market grew 45% last year and is expected to grow at 25% annually until 2010, according to a study by the Centre for Asia Pacific Aviation and the Federation of Indian Chambers and Commerce and Industry. This would create a market that could absorb about $120 billion (Rs5,28,000 crore) in investments over the next 20 years.
Airport investments currently total $9 billion (Rs39,600 crore), and could reach $30 billion (Rs1,32,000 crore), the study said.
Despite the aggressive growth plans, almost all airlines are consistently in the red. The ones that are showing profits are deriving these from income unrelated to ticket sales. The airlines are also plagued by high fuel costs, intense competition that forces them to drop prices below profitable levels, and expensive delays at crowded airports.
Patel said he wanted to cut jet fuel prices, and had spoken to oil producers to reduce the base price of fuel. “I have got a positive response and I hope to see the results of lower base price on fuel this year,” he said.