India offers an attractive long-term growth
India’s current passenger fleet will double to almost 1,100 aircraft by 2027 – with the total value of aircraft to be delivered over the coming ten years, at current list prices, projected to be US$60 billion, according to an industry paper.
After taking account of existing orders, there is a shortfall of 300 aircraft, with a current value of US$20 billion, for India’s airline fleet development over the next ten years, according to the report by Avolon, the international aircraft leasing company.
This includes requirements for 125 narrow-body jets, 125 wide-body jets and 50 large regional aircraft.
While economic and structural barriers remain, India offers an attractive long-term growth market with opportunities in the region significantly outweighing the challenges.
Access to domestic and international air travel has never been greater for Indian travellers and an expanding middle class is increasingly taking advantage of the extensive network of domestic routes.
However, the international aviation sector in India has been under-developed and, in order to achieve its full potential to support long-term economic growth, trade and tourism, it is imperative that it receives renewed focus and investment, said the paper ‘India, a 21st Century Powerhouse’.
Indian airlines currently operate almost 600 passenger aircraft – 75% narrow-body, 11% widebody and 14% regional aircraft.
Notably, over 60% of the in-service and committed fleet comprise future technology types.
Domestic passenger demand is forecast to grow at an average annual rate of 9.6% over the coming decade, while an 8.3% growth rate is forecast for international passengers, according to Avolon, the international aircraft leasing company.
Indian airlines passenger volume increased 14% on the year to 22.8 million international passengers were carried in 2017.
The domestic passenger volume increased by 17.4% on the year to almost 117 million in the 2017.
Annual domestic passenger growth has averaged 15% since 2012.
Domestic passenger demand is forecast to grow at an average annual rate of 9.6% over the coming decade, while an 8.3% growth rate is forecast for international passengers.
India’s airports handled 295 million passengers in 2017, with the five busiest airports all approaching – or already exceeding – their terminal capacities.
Despite significant state and private investment being committed, airport capacity will likely remain a constraint on growth.
Low cost airlines carry 65% of domestic passengers and their dominance is set to be maintained into the future, with load factors amongst the highest in the world, said the paper.
The paper was released at the Farnborough Air Show 2018 on 16 July 2018. fiinews.com
