It is not Airbus but Boeing that dominates the wide-body segment of the Indian aircraft market, says Dinesh A Keskar. In an interview with BusinessLine at Boeing headquarters in Seattle, Keskar explains why he remains bullish on Boeing in India. Excerpts:

Do you stand by your last year’s forecast for aircraft requirement in India?

There is no change in our forecast made last year that India will require 1,600 airplanes worth $205 billion in the next 20 years, and 70 per cent of this will consist of Boeing 737 and Airbus A320 types. We will, however, update this (forecast) in August.

On what basis did you make the forecast?

There is a direct correlation between GDP growth and passenger growth. For an 8 per cent growth in GDP, you will get a 12 per cent growth in passenger traffic. We have consistently seen that in India, which has witnessed one of the largest domestic traffic growth in the world.

Is India’s growth better than the global trend?

Yes, the long-term growth of India’s aviation sector is around 8 per cent while the global rate is 4.8 per cent. The 20 per cent growth witnessed in the last quarter happens radically, in one or two quarters. And, the fleet size increases by the same rate.

The present fuel and exchange rate helps.

There are other reasons for the growth. Fuel price is lower than the historical highs of $150 witnessed in the past; the exchange rate is stable at ₹63-64 a dollar. When the rate was erratic, it was hard to plan. However, when it is stable, airlines can plan well. And most importantly, supply and demand in the Indian market is quite balanced. It was good to see SpiceJet announce profits last quarter after a long time, Jet will continue to improve and Air India is also looking good. The Indian market is there for a long haul. People in India say that in next decade the country will be among the top three markets globally. Right now, our market prediction keeps India on the top 10 for sure.

There is always this perception that India is an Airbus market. Your comments.

I am quite surprised with this view. Boeing has been in India for the last seven decades. We started working with DC3 (Tata Airlines flew the DC-3 aircraft into India 70 years ago), and today have three major customers – Air India, Jet Airways and SpiceJet. Up to 2000, only Indian Airlines had Airbus’ narrow-body aircraft. Every single private sector airline, including Modiluft, East-West, Damania, Jet Airways and Royal Airways, started with Boeing airplanes. Then came the start of IndiGo and GoAir and that’s when Airbus made its entry. Sure, Airbus has sold 180 planes to IndiGo and delivered 90 or so but Jet operates 70 of the 737 aircraft, Air India operates 20, SpiceJet 19 and another seventy-five has been ordered. Add up these numbers on both sides it is 50:50. Airbus has sold 180 airplanes but when will the delivery happen? That’s important.

Does Airbus have better market share than Boeing in India?

It is absolutely untrue that Airbus has 80 per cent market share in India as claimed by recent media reports. In the current installed base, we are 50:50 when it comes to 737 and A320 aircraft. When it comes to wide-body (that’s what Airbus was talking about in the media), we have more than 80 per cent of the market share. When you look at wide-body aircraft like 787, Air India has 20 airplanes with seven more to go. Jet Airways has ten 787s on order and has ten 777-300 ERs (Extended Range), Air India has sold five of its planes to Etihad but still has three LRs (Long Range) and twelve 777 ERs. In comparison, Airbus does not have a single A350 or A380 and they have one or two A330s (in the market). Jet Airways has a few. We dominate the wide-body market. They are adding 400 aircraft for IndiGo, but I don’t know where they will park so many.

Will the 50:50 market share between Boeing and Airbus continue?

Yes, because we will sell Max (737 MAX family of airplanes) and they will sell their NEOs (Airbus' A320neo) and there will be a balance. However, when it comes to wide-body aircraft, we are ahead.

(The writer was in Seattle at the invitation of Flydubai)

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