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Airbus Estimates 1000 Planes Demand From India  
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Posted (8 years 9 months 1 week 6 days 23 hours ago) and read 2960 times:

Airbus estimates about 1000 planes market for India over the next 20 years. This will amount to a five-six fold growth in aircrafts for India. Link:
http://www.forbes.com/business/feeds/afx/2005/12/07/afx2375127.html

Quotes:
European aircraft maker Airbus today said India's fast-growing aviation sector is expected to order between 800 and 1,000 planes over the next two decades. 'The Indian market is very strong... we see between 800 to 1,000 aircraft being ordered from the country over the next 20 years,' Kiran Rao, Airbus Industrie's senior vice president, told reporters. He said Airbus expects at least 40 of these orders to be for the new super-jumbo A-380 aircraft.

State-run Indian Airlines, the second-largest domestic airline, has placed orders for 43 Airbus aircraft over the next five years. Airbus also has orders for about 188 aircraft from private airlines in India.

18 replies: All unread, jump to last
 
User currently offlineGr8Circle From Canada, joined Dec 2005, 3106 posts, RR: 4
Reply 1, posted (8 years 9 months 1 week 6 days 23 hours ago) and read 2908 times:

Sorry, sounds a bit strange for me to be contradicting the analysis of an aircraft manufacturer....but I have doubts if this figure would be achieved....mys personal thoughts, so don't attack me.....

We saw the same haywire estimates of the Indian market for consumer products, when the economy opened up early 90's - and we all know what happened.....

I would personally guess more like 400-500 aircrafts over next 20 years....

[Edited 2005-12-09 17:16:57]

User currently offlineHAWK21M From India, joined Jan 2001, 31684 posts, RR: 56
Reply 2, posted (8 years 9 months 1 week 6 days 23 hours ago) and read 2894 times:


Where is the Infrastructure.
Where are the bays  Smile
regds
MEL



Think of the brighter side!
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 3, posted (8 years 9 months 1 week 6 days 22 hours ago) and read 2822 times:

Quoting HAWK21M (Reply 2):
Where is the Infrastructure.
Where are the bays

I think 20 years is enough time to build the infrastructure. Furthermore, more point to point flights will reduce the burden on BOM and DEL. New airports at BLR and HYD are coming up. Expansion at MAA is on as land has been dedicated by TN gift. BOM and DEL expansion is moving along with two bidders, GRM and Reliance, left in fray.

A five fold increase in aircrafts translates to 8-9% annual growth in passengers over the next twenty years. Current projections are for twenty percent growth over the next five years, and even if the actual growth for next five years is only 15%, it leaves next 15 years with a growth of 6% per annum, which is achievable.


User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 4, posted (8 years 9 months 1 week 6 days 18 hours ago) and read 2706 times:

Quoting HAWK21M (Reply 2):
Where is the Infrastructure.
Where are the bays

BTW, who is that photograph of?


User currently offlineJaysit From , joined Dec 1969, posts, RR:
Reply 5, posted (8 years 9 months 1 week 6 days 18 hours ago) and read 2683 times:

Quoting Gr8Circle (Reply 1):
We saw the same haywire estimates of the Indian market for consumer products, when the economy opened up early 90's - and we all know what happened.....

The early 90s were very different.

Closed economies do not open up in either a linear fashion, or all at once. Fifteen years later, the scenario is very different. Plus, a lot of Western companies began selling goods that had no demand in India because of varying cultural and culinary habits (one good example is Tropicana - Indians just didn't take to drinking vast amounts of OJ). Companies have become much savvier in delivering products to India now. Case in example: Coca Cola. Even in the remotest parts of India, you'll find a Coke distribution network.

In any case, who - 15 years ago - would have thought that India today would have over a dozen thriving private carriers and that the demand for air travel in India would be as high as it is today?


User currently offlineCricket From India, joined Aug 2005, 2968 posts, RR: 7
Reply 6, posted (8 years 9 months 1 week 6 days 6 hours ago) and read 2539 times:

The size of the Civil Fleet right now ~ 225-230 of which around 175-180 are for domestic opns.
If the aircraft ordered/expected to be ordered in just 2004 and 2005 come along by 2010-12 (when these planes are delivered) the size of the fleet would have touched 500 (I'm assuming there will be lease returns and retirements). In 2005 alone, as per list prices Indian carriers have ordered around $30-35 billion worth of planes (around 350-odd aircraft including options).
Who knows what'll happen in 2006, whats the betting against another 100 aircraft order from a random start-up?
Ergo, 1000 aircraft in 20 years is more than believable.



A300B2/B4/6R, A313, A319/320/321, A333, A343, A388, 737-2/3/4/7/8/9, 747-3/4, 772/2E/2L/3, E170/190, F70, CR2/7, 146-3,
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 7, posted (8 years 9 months 1 week 5 days 20 hours ago) and read 2436 times:

Quoting Gr8Circle (Reply 1):
I would personally guess more like 400-500 aircrafts over next 20 years....

In an article that discussed linkages between GDP growth and air traffic growth, a multiplier of 1.3 was suggested. India's GDP is currently growing at 8% and is likely to grow at an annual rate of 7% over the next twenty years. Using the 1.3 multiplier air traffic should grow at about 9% over the next twenty years which translates to a five fold growth in air traffic. Five fold growth in traffic would require a five fold growth in aircrafts. Given a current fleet of 225, a five fold growth would suggest demand for 1125 aircrafts. Airbus predicts 1000 aircrafts which is perhaps on lower side.


User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12146 posts, RR: 51
Reply 8, posted (8 years 9 months 1 week 5 days 19 hours ago) and read 2418 times:

Quoting LAXDESI (Thread starter):
Airbus estimates about 1000 planes market for India over the next 20 years. This will amount to a five-six fold growth in aircrafts for India.



Quoting LAXDESI (Thread starter):
He said Airbus expects at least 40 of these orders to be for the new super-jumbo A-380 aircraft.

So, AI could be the second largest operator of the A-380?

Quoting Gr8Circle (Reply 1):
I would personally guess more like 400-500 aircrafts over next 20 years....

500 additional airplanes (over the current fleet size of 225) over the next 20 years seems like a much more reasonable number. 1000 additional airplanes is a little too optomistic, I think.

Quoting LAXDESI (Reply 7):
India's GDP is currently growing at 8% and is likely to grow at an annual rate of 7% over the next twenty years. Using the 1.3 multiplier air traffic should grow at about 9% over the next twenty years which translates to a five fold growth in air traffic.

Yes, India is experiencing a tremendous growth, right now. I really doubt India, or any other country in the world today can maintane a 7%+ growth in GDP over 20 years. There is a lot of competition from the EU, US, UK, Russia, China, Japan, etc. I don't think any country has maintaned a 7%+ GDP growth over 20 years in history.


User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 9, posted (8 years 9 months 1 week 5 days 19 hours ago) and read 2412 times:

Quoting KC135TopBoom (Reply 8):
I don't think any country has maintaned a 7%+ GDP growth over 20 years in history.

China has had growth of around 9% over the last two decades. Link:
http://www.chinadaily.com.cn/english/doc/2005-03/21/content_426718.htm


User currently offlineComorin From United States of America, joined May 2005, 4896 posts, RR: 16
Reply 10, posted (8 years 9 months 1 week 5 days 18 hours ago) and read 2343 times:

Quoting LAXDESI (Reply 7):
In an article that discussed linkages between GDP growth and air traffic growth, a multiplier of 1.3 was suggested. India's GDP is currently growing at 8% and is likely to grow at an annual rate of 7% over the next twenty years. Using the 1.3 multiplier air traffic should grow at about 9% over the next twenty years which translates to a five fold growth in air traffic. Five fold growth in traffic would require a five fold growth in aircrafts. Given a current fleet of 225, a five fold growth would suggest demand for 1125 aircrafts. Airbus predicts 1000 aircrafts which is perhaps on lower side.

Excellent analysis, but your math assumes that seats/aircraft remains the same. Given the preponderance of 320- and 737- size aircraft in today's market, the variance between your estimates and Airbus could be explained by assuming fleet shifts to larger planes.

As an armchair economist, my 2c says that the Airbus projections are conservative, since the 225 planes today represent a constrained market - airports, capital and so on. It could be argued that even if the economy didn't grow at 7%, we could still see a 100% growth in traffic based on pent-up demand for the next five years.

A little 'back of the envelope' 5 -year market analysis :

50% of existing aircraft retired next five years = 120 new planes
9% growth in traffic ( based on GDP factors) = addl 180 new planes
Substitution of mode (road and rail to air), 10% annually = 200 new planes

Total new aircraft demand = 600 in next 5 years.

That's still really small for a country of 1B+ people!

I wonder if anyone has access to the Airbus research on this.  scratchchin 


User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 11, posted (8 years 9 months 1 week 5 days 16 hours ago) and read 2290 times:

Quoting Comorin (Reply 10):
but your math assumes that seats/aircraft remains the same. Given the preponderance of 320- and 737- size aircraft in today's market, the variance between your estimates and Airbus could be explained by assuming fleet shifts to larger planes.

Fleet shift to larger aircrafts like A330 is possible, but the orders by Indian carriers indicate that the choice for domestic sector remains B737/A320 family of aircrafts. A330s make a lot of sense on major domestic routes and can also be used for SE Asia and Middle East markets too.

Quoting Comorin (Reply 10):
Airbus projections are conservative, since the 225 planes today represent a constrained market - airports, capital and so on.

I agree. Furthermore, with increased competition and resulting lower fares expect more people switching from rail and road. Many Indian cities with population of half a million to one million are not adequately connected.

Quoting Comorin (Reply 10):
50% of existing aircraft retired next five years = 120 new planes

Good point. I had not even thought of replacement demand as equipment ages over the next twenty years.


User currently offlineIkramerica From United States of America, joined May 2005, 21529 posts, RR: 59
Reply 12, posted (8 years 9 months 1 week 5 days 16 hours ago) and read 2247 times:

Quoting LAXDESI (Reply 7):
Five fold growth in traffic would require a five fold growth in aircrafts.

you must take into account better utilization as fleet size expands, however, so maybe 4 fold is more likely, which does fit in with that 1000 number pretty well.

Quoting KC135TopBoom (Reply 8):
I really doubt India, or any other country in the world today can maintane a 7%+ growth in GDP over 20 years.

it can lead to inflationary pressures and recessions. but it doesn't have to.



Of all the things to worry about... the Wookie has no pants.
User currently offlineHalibut From , joined Dec 1969, posts, RR:
Reply 13, posted (8 years 9 months 1 week 5 days 1 hour ago) and read 2150 times:

Quoting KC135TopBoom (Reply 8):
Yes, India is experiencing a tremendous growth, right now. I really doubt India, or any other country in the world today can maintane a 7%+ growth in GDP over 20 years. There is a lot of competition from the EU, US, UK, Russia, China, Japan, etc. I don't think any country has maintaned a 7%+ GDP growth over 20 years in history.

What one must understand is : Due to China's huge population , China would need to maintain a GDP of 7 % to sustain economic grow , anything lower would = recession ! The same can be said for India , though the #'s may be slightly different . So if you do the math , you'll see that the US is doing just as good , if not better than these 2 incrediblly populated countries .

There growth is impressive , but don't be fooled ! All those billions of people need shoes !

They're playing catch up !

Halibut


User currently offlineGr8Circle From Canada, joined Dec 2005, 3106 posts, RR: 4
Reply 14, posted (8 years 9 months 1 week 5 days ago) and read 2080 times:

People keep referring to the 1b population...keep in mind that almost 80% of those will never be able to afford flying....we're talking about a pop. of just 200m odd that can be targetted for commercial flying....

User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 15, posted (8 years 9 months 1 week 4 days 18 hours ago) and read 2015 times:

Quoting Gr8Circle (Reply 14):
keep in mind that almost 80% of those will never be able to afford flying..

Never? Keep in mind India's GDP will be about four times larger than it is today in 20 years. Give it 40 years and most Indians will be able to afford flying.


User currently offlineTWA902fly From United States of America, joined Dec 1999, 3128 posts, RR: 4
Reply 16, posted (8 years 9 months 1 week 4 days 18 hours ago) and read 2010 times:

...900 of those will be A380s

'902



life wasn't worth the balance, or the crumpled paper it was written on
User currently offlineJaysit From , joined Dec 1969, posts, RR:
Reply 17, posted (8 years 9 months 1 week 4 days 18 hours ago) and read 2002 times:

Quoting Gr8Circle (Reply 14):
People keep referring to the 1b population...keep in mind that almost 80% of those will never be able to afford flying....we're talking about a pop. of just 200m odd that can be targetted for commercial flying....

And that's about 2/3 the size of the United States. By any stretch of the imagination, a market of 200 million people is huge.

Presently, only a fraction of that 200 million market has been tapped.


User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 18, posted (8 years 9 months 1 week 4 days 18 hours ago) and read 1999 times:

Quoting TWA902fly (Reply 16):
900 of those will be A380s

I don't get your comment. Can you elaborate?


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