India’s capacity growth in civil aviation far outpaced that of the global market during July 2016, in comparison to the corresponding period last year, reveals a study done by aircraft manufacturer Boeing.
While releasing a 20-year forecast report on Indian aviation, Dinesh Keskar, senior vice president – sales, Asia Pacific & India, Boeing Commercial Airplanes, said the number of seats increased by 18.5% to/from/within India during the current month as compared to the corresponding month last year.
On the global level, the increase was a mere 5.6%.
Similarly, the number of flights increased 16% during the ongoing month in contrast to just 3.9% increase reported among the global average. Further, on similar lines ASKs (ASK stands for available seat kilometres, which is a measure of airline’s flight passenger capacity) increased by 14.8% for India as against the global average increase of 6.7%. ASK is derived when the number of seats available is multiplied by the number of kilometres flown.
As per the forecast report, there is a demand for 1,850 new aircraft valued at $265 billion in India for over a period of next two decades. The report does not take into consideration the new aviation policy announced by the current regime recently. “I have been hearing about the aviation policy for India since I joined the aviation industry in 1987. But it’s out only now. We see greater opportunities and are more bullish on India now. The report numbers would have been different had the new avaition policy, which came later, had been encompassed in it,” said Keskar.
Confirming the global trend, the report points out that the single-aisle airplanes would account for 84% (1,560 airplanes in number) of the total demand from India.
However, Keskar warned the industry captains to be cautious on three factors. “The first is overcapacity (availability of more number of aircraft than the demand), increase in fuel price (which has increased by 35% over the last 6 months) and the currency exchange rate (rupee has weekend 15% in relation to the US $ since its strongest point in 2014.”
“If these three things are kept in check then the growth can be maintained,” he said.
Talking about the regional connectivity in India as proposed by the new aviation policy, Keskar said that he has some concerns over the Rs 2,500 cap, as operating costs of smaller planes are about 40% higher per seat than the larger aircraft. The regional connectivity is obviously dependent on connecting smaller planes of below 80 seats. “However, the good thing is that the government has done a balancing act by offering incentives to such airlines offering regional connectivity, even if they run in losses.”
When asked which Indian airline would be seeking more aircraft after liberalisation of the aviation policy, Keskar said, “Vistara has been very vocal about liberalising the sector and at some stage in distant future, it may have to go for long-haul planes for achieving their plans.”