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Boeing revises India aircraft forecast to 1,850 new Jets over 20 Years

Boeing Co expects Indian airlines to order 1,850 new aircrafts worth $265 billion over the next 20 years

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Visitors look at models of Boeing aircrafts at the Aviation Expo China 2015, in Beijing, China, in this September 16, 2015 Image source: REUTERS/Jason Lee/Files
  • In March 2016, the company had forecasted that demand from India would add up to orders for 1,740 planes over 20 years
  • Boeing mentioned it has more than 85 percent share of the wide-body airplane market in India
  • LCCs dominate Indian skies and account for more than 60 percent of the flights in the country

India’s commercial aerospace market has made significant headway as they see an upward curve in the demand of new aircrafts.

Boeing Co (BA.N) said on Tuesday, July 19, it expects Indian airlines to order 1,850 new aircraft worth $265 billion over the next 20 years, up from an earlier forecast, thanks to the new aviation rules that the manufacturer said will boost demand.

In March 2016, the company had forecasted that demand from India would add up to orders for 1,740 planes over 20 years.

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“India continues to have a strong commercial aerospace market and the highest domestic traffic growth in the world,” said Dinesh Keskar, senior vice president, Asia Pacific and India sales at Boeing Commercial Airplanes.

Dinesh Keskar, Senior Vice President, Asia Pacific and India sales Boeing Commercial Airplane. Image source: www.thehindubusinessline.com
Dinesh Keskar, Senior Vice President, Asia Pacific and India sales Boeing Commercial Airplane. Image source: www.thehindubusinessline.com

“With the new aviation policies in place, we even see greater opportunities, and remain confident in the market and airlines sector in India,” Keskar said.

Last month, in June in India overhauled rules governing its aviation industry, liberalising norms for domestic carriers to fly overseas and spreading the country’s air travel boom to smaller cities by capping airfares and opening new airports.

Boeing said in an email that it forecasts single-aisle planes, such as the next generation 737 and 737 Max, to make up the bulk of new deliveries, with India likely to need about 1,560 such aircraft.

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Boeing says it has more than 85 percent share of the wide-body airplane market in India, while competitor Airbus (AIR.PA) sells the bulk of small planes preferred by low-cost carriers (LCCs) such as InterGlobe Aviation’s (INGL.NS) IndiGo.

LCCs dominate Indian skies and account for more than 60 percent of the flights in the country.

Boeing expects worldwide demand for 39,620 aircraft over the next 20 years, putting India’s share of the total at less than 5 percent. With that being said, Boeing still maintains a  bullish outlook for the country’s commercial aerospace market. (Reuters)

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Not so long ago the Indian government had a target to connect 40 million households to the national grid by the end of 2018. It even tasked CIL, the state coal monopoly, to produce over a billion tonnes of coal per year by 2020, an increase of almost 100% from 2016. It’s an ambitious goal, notwithstanding the environmental impacts of mining for such an unprecedented amount of coal. This is the same coal that already generates 70% of India’s primary commercial energy requirement; compare that figure to the UK’s 11%, Germany’s 38%, and China’s 68%, while France has practically shut all of its coal power stations. This means that India’s shift from coal could have important implications for the global climate, and any investors looking towards coal would be making a very brave and risky decision.

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Coal consumption forecasts have already been downgraded significantly from 2013 projections, and major shifts in energy policy like Modi’s are likely to add significant weight to the idea that India might well become a much bigger player in renewable energy production in the next 20 to 30 years – although it’s difficult not to see coal remaining an important power source considering India’s significantly large coal reserves still available in Eastern India.