Boeing On India Market - Can Growth Take Off?

There's a huge market waiting, but will it ever mature enough?
COMMENT, Business Trends


Air India has been known to speak with a forked tongue over the delays to the 787 yet is financially incapable of taking three 777-300ERs when it placed one of the biggest orders in its history back in 2005 at the cusp of the last growth cycle.

So is Boeing’s evaluation of India overly ambitious?

Not necessarily – that they surmise demand totalling 1,150 units over 20 years is realistic enough – the question is how much of those units end up being delivered. India’s competitive landscape is rather unorthodox – the Government insists that new airlines must complete five years domestic service before they can fly overseas, yet these same home grown airlines are at the mercy of their Persian Gulf based rivals in the form of Emirates, Etihad and Qatar Airways.

Compounding the problem is the threat from more agile and nimble carriers like Air Arabia and FlyDubai, who with their aggressive pricing risk stealing that domestic market access and churning into more profitable long haul travel away from the likes of Air India and Jet Airways.

The slow, but growing infrastructure is aiding the revival of air travel as a more convenient mode of transport for the domestic populace but if Boeing’s market vision is to be realised, the Indian authorities have to do more to encourage growth instead of stifling it.

How are Indian airlines supposed to counter the competitive threat from overseas when they can’t even fly outside their own borders?

Liberalisation is the way forward and if OEMs are to tap into the worlds second most populated country, they need policies in place which work toward facilitating the growth Boeing sees over the coming next two decades.

This column was written by FBE Aerospace analyst Saj Ahmad, the views expressed are his own.

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