India lost 9 percent of its airline seat capacity as a result of Kingfisher suspending operations since October 1, 2012, when its 66-aircraft fleet was grounded, according to Dinesh Keskar, Boeing’s senior sales vice president for Asia Pacific and India. Speaking at the Aero India show in Bangalore this week, Keskar said that in the short term, with capacity still constrained, profit margins will improve for some airlines, but that some low-cost carriers may find themselves negatively impacted because traffic growth is slowing. “Supply and demand is [now] in balance and India is seeing steady growth,” he commented. Boeing says it still believes in its most recent Current Market Outlook, which sees Indian airlines needing 1,450 new airplanes valued at $175 billion over the next 20 years. Outstanding orders from the Indian market for Boeing include 21 787s for Air India, plus 44 737s for Jet Airways and 1 for SpiceJet.
“With new engine technology added to proven 737 advantages, the 737 Max is the right airplane for the Indian market,” claimed Keskar, referring to Boeing’s challenger to the rival Airbus A320neo twinjet. Meanwhile, by June the U.S. airframer expects to complete construction of several new hangars at Indian airports as part of its offset commitment for the sale of 111 aircraft to government-owned Air India. The first of these jets is due to be delivered by the end of 2013.
A recent joint report by the Federation of Indian Chambers of Commerce and Price Waterhouse said the Indian civil aviation sector has continued to experience high passenger growth (domestic traffic compound annual growth is 17 percent from 2009 to 2011), and if the trend continues it could rank among the top three aviation markets in the world by 2020. The report maintained that this would be a good time for global players to enter India and explore the potential of a large under-served market.