India airline growth spurt to continue

Singapore Air Show » 2006
December 1, 2006, 5:47 AM

India’s air transport boom could continue at a phenomenal growth rate of 20 to 25 percent for the next three or four years, according to Boeing’s top salesman for the country. Dr. Dinesh Keskar, senior vice president sales with Boeing Commercial Airplane, has also predicted that India’s established incumbent carriers, such as Air India and Jet Airways, will provide the main impetus for the continued growth, rather than the new challengers.

According to Keskar, the extraordinary growth in India’s air transport industry is sustainable based on the assumption that the country’s burgeoning middle class (up to 200 million people out of a total population of around billion). It will continue through a combination of domestic expansion of new city pairs and increased international traffic made possible by a string of anticipated new bilateral agreements.

However, Keskar also cautioned that continued fuel price inflation could yet put the dampers on Indian airline growth. “I didn’t ever dream of the sort of growth. We have gone from famine to feast and I hope we don’t go backwards,” said the Indian executive, who has lived in the U.S. since 1974.

Unsurprisingly, Boeing believes that its 737 family will prove to be the key expansion tool for new routes. Keskar pointed to the example of Jet Airways, which already had 40 of the single-aisle jets and is now trying to buy Air Sahara which has a further 20 units (and up to 60 more on order or option). He acknowledged that turboprop aircraft are being used by carriers like Air Deccan and Kingfisher to develop secondary routes, but argued that as traffic soon grows these operators will be looking to move up to equipment with between 150 and 190 seats.

Boeing’s sales strategy in India has been mainly focused on the incumbent carriers. Keskar said that the U.S. airframer expects to see consolidation among Indian carriers, as exemplified by the expected Jet Airways takeover of Air Sahara.

Boeing To Train

In April, Boeing expects to announce plans to develop new maintenance and pilot training facilities in India. These will almost certainly be done in partnership with an Indian ainline–almost certainly flagcarrier Air India. Through its Alteon subsidiary, Boeing has already provided training for hundreds of Indian pilots at its existing training centers in the Asia/Pacific region. These are located in Singapore, Seoul, Kunming (China) and Brisbane (Australia). Boeing’s existing office in India is mainly engaged in customer support and currently employs six people.

Keskar said that the Indian government’s recently announced privatization of the country’s main airports at Mumbai and Dehli spells good news for the development of air transport infrastructure.

The fresh investment in these gateways will make possible increased traffic throughput. In his opinion, there is scope for development of another 80 airports throughout India.   

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