India to be world's most significant new profitable aircraft market: Barclays
India has become a key market for the global aerospace and defence industry, with its remarkable growth rate in traffic making it the world's most significant new aircraft market, according to a report by Barclays
PremiumIndia, with its remarkable growth rate in traffic, has emerged as a prominent market for the global aerospace and defense industry, Barclays said in a report on Thursday. The report also mentioned that India is the world's most significant new aircraft market. India is currently the third largest aviation market in the world, only behind the US and China, in terms of domestic traffic.
"The growing middle-class population with an increased propensity to travel stimulated by a government initiative through the UDAN Regional Connectivity Scheme has made India a key source of demand for new aircraft," Barclays said.
India stands as the second-largest recipient of aircraft orders globally, closely trailing the United States. Presently, Indian carriers account for approximately 7 per cent of all Boeing and Airbus deliveries.
With the country's projected annual traffic growth anticipated to remain 200 basis points higher than the long-term global average, experts predict India will continue to maintain a similar proportion of aircraft deliveries in the future.
"With important fleet decisions to make by IndiGo, Akasa Air, Jet Airways, the battle for market share is likely to continue. Any wins in the Indian market will ensure a permanent stream of delivery at a time when the share of China compared to the last decade is expected to decline with the recent entry into service of Comac's C919," it said.
The significance can be seen in the fact that it accounts for 10 per cent of the GTF (geared turbofan) and Leap engines installed fleet compared to 1 per cent for the previous V2500 and CFM56 engine generation.
"India is a focal market for the global aerospace and defence industry," Barclays said, adding, “With domestic traffic growth of 11 per cent CAGR (Compound Annual Growth Rate) between 2006 and 2019 and annual traffic growth forecast to remain 200 bps above the long-term global average, Indian carriers have ordered more than 1,400 aircraft between 2009-22. Indian carriers now have the second-largest order book, with a share more than 6 per cent of the industry backlog, behind only the US."
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