Airbus raises forecast for India aircraft demand

Airbus raises forecast for India aircraft demand
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First Published: Thu, Mar 04 2010. 10 39 PM IST

 Graphic: Ahmed Raza Khan / Mint
Graphic: Ahmed Raza Khan / Mint
Updated: Thu, Mar 04 2010. 10 39 PM IST
Hyderabad: European aircraft maker Airbus S.A.S. on Thursday raised its forecast for the number of planes it expects to sell in India between 2009 and 2028 to 1,032, valued at $132 billion.
Graphic: Ahmed Raza Khan / Mint
It had earlier said India would need 992 planes between 2008-2027 at a cost of $105 billion. Both estimates includes passenger and freight aircraft.
US-based rival Boeing Co. however, increased its forecast for the same period by only one plane, from 999 for 2008-2027.
Boeing said it would revise its forecast in July and indicated that the expected improvement in earnings at domestic carriers may lead to a rise in orders.
The total number of aircraft orders, projected by Airbus and Boeing, however, falls far short of the rather optimistic projection of 3,000 aircraft, within a time frame of 10 years by civil aviation minister Praful Patel on Tuesday, as opposed to the aircraft manufacturers’ timeframe of 20 years.
“The Indian economy is showing signs of rebounding and this will translate to new aircraft orders by 2012. Long term, the potential for growth in India’s aviation sector remains exceptional,” said Miranda Mills, Airbus’s India vice-president (sales) at Indian Aviation 2010, the second international conference on civil aviation being held in Hyderabad.
The Airbus demand growth numbers are based on its projection that India will be the fastest growing market for air travel for the next decade, with domestic traffic increasing by an average 12.2% annually. Traffic growth will also be among the world’s highest, averaging 7.3% over the next 20 years compared with the currently global average of 4.7%.
A Wednesday report from global consulting firm Ernst and Young said that domestic and international passengers from India are expected to increase over the long term at annual rates of 20% and 16%, respectively. This, the report added, would result in an “overall increase of around 19% per year”.
Domestic airlines in India, the ninth largest aviation market globally, currently operate 336 aircraft, with another 293 that have been ordered and are expected to be delivered over the next three years.
Airbus’s Mill said the new estimate comprises 638 single aisle (medium size) planes from the A320 family, 287 twin aisles (large size) such as the A350 and A330, and 68 very large aircraft such as the A380, which is also the world’s largest passenger aircraft. Additionally, 39 new aircraft such as the A330-200F are expected in the cargo segment.
She said the estimated number of new aircraft required by Indian carriers is the world’s fifth largest.
“By 2028, Indian passenger fleet will almost quadruple to 1,163 aircraft…. The freighter market will grow nearly 20-fold by 2028, mushrooming to 210 aircraft comprising of 39 new freighters and 171 conversions from passenger aircraft,” she said.
Unlike Airbus, which envisions larger planes entering the fleet, Boeing’s India president Dinesh Keskar said the country would largely need midsize planes and that there is no scope for bigger planes as airlines are increasingly opting for more point-to-point connections.
“The good thing is that domestic passengers traffic has recovered from 2008-09 slump. India has witnessed record traffic of 4.09 million passengers in January 2010,” Keskar said, adding that he hoped domestic airlines would not again create excess capacity, as they did last year and which led to a $2 billion loss in last financial year.
Akbar Al-Baker, chief executive officer of Qatar Airways, also cautioned that carriers should not get carried away by the recent recovery in civil aviation. “I think people should not get carried away by the illusion that there is an upturn in traffic,” he said, adding that the more important factor was yields.
He warned a second economic dip globally was likely in the second half of 2010 and that pressures on yields would continue for the foreseeable future. “ So airlines should pull their stockings and be ready for difficult and bumpy 2010,” Al-Baker said.
pr.sanjai@livemint.com
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First Published: Thu, Mar 04 2010. 10 39 PM IST