Boeing’s chief salesman for commercial aircraft in Asia-Pacifc predicts India’s passenger market will rebound strongly this year.
Dinesh Keskar, Boeing senior VP-sales Asia Pacific, speaking to Aviation Week on the sidelines of the Aero India air show and exhibition in Bengaluru, notes that while domestic passenger traffic was down in 2012, in part because of Kingfisher Airlines’ financial problems, “we think this year domestic passenger traffic will grow 8-10%. This is because the fundamentals are there: GDP growth, higher discretionary income, propensity for business and VFR [visiting friends and relatives].”
He also says India’s government has taken positive steps to improve the country’s airport infrastructure, citing the example of Chennai International Airport, which recently expanded.
“They [the government] are already working to improve the infrastructure, and the Directorate General of Civil Aviation has demonstrated an ability to increase the number of takeoffs and landings per hour at existing airports.”
Much of the growth in India’s airline sector has come from low-cost carriers (LCCs). Keskar says LCCs have become adept at winning over business travelers, which he attributes to companies becoming more cost-conscious.
LCCs now account for 70% of India’s domestic traffic, and Keskar expects the market-share split between full-service carriers and LCCs will remain at this level, although LCCs may gain another five percentage points.
Keskar says reports of Etihad Airways’ plan to buy a stake in Jet Airways is a positive development for India’s airline industry. “It shows the future of Indian aviation is good.” And should Jet Airways gain new capital, its debt-to-equity ratio will improve and will facilitate access to cheaper aircraft financing, Keskar adds.
The Boeing executive, who sees India as a huge market of strategic importance to airlines, predicts other foreign carriers will follow Etihad and buy into Indian carriers. India’s domestic traffic can feed into a foreign carrier’s international network, he says.