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Airline purchases until 2037 to be worth $320 billion, says Boeing

Airlines in India will need 2,300 moreplanes, valued at $320 billion, until 2037, aerospace major Boeing said on Wednesday in its market outlook. Globally, the number needed in the next 20 years is projected at 42,370 planes worth $6.3 trillion. The Asia-Pacific region accounts for almost 40% of the worldwide estimates, and India for 5%.

Narrow body planes

As much as 84%, or 1,940 aircraft, of deliveries to India are likely to be of narrow body planes. Wide-body planes will account for 15% of total deliveries or 350 planes. Regional jets will account for the remaining 1% or 10 planes, Boeing said.

The commercial services market in India is valued higher than that of aircraft purchase and is projected to be worth $430 billion. These services primarily include ground handling, maintenance and engineering and cabin services.

Over the same period, India would continue to be the fastest-growing market at 7.8% growth rate with a huge appetite for air travel — while 0.1% of the Indian population took a flight in 2017, the same figure for U.S. was 3%.

Despite the growth projection for India, there was a note of caution for airlines to bring discipline in airfares.

“Irrational prices are a matter of concern. These are currently at 14-5% less than where airlines can earn break even. Given fuel prices are at a one-year low and forex, too, has dropped to ₹70 to a dollar, airlines should use this as an opportunity and address the issue,” said Dinesh Keskar, senior VP, Asia Pacific and India sales, Boeing Commercial Airplanes. He clarified, though, the lack of profitability of Indian airlines hadn’t impacted Boeing’s order book.