LAXDESI
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Airbus Estimates 1000 Planes Demand From India

Sat Dec 10, 2005 12:39 am

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.
 
Gr8Circle
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RE: Airbus Estimates 1000 Planes Demand From India

Sat Dec 10, 2005 1:16 am

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]
 
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HAWK21M
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RE: Airbus Estimates 1000 Planes Demand From India

Sat Dec 10, 2005 1:20 am


Where is the Infrastructure.
Where are the bays  Smile
regds
MEL
I may not win often, but I damn well never lose!!! ;)
 
LAXDESI
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RE: Airbus Estimates 1000 Planes Demand From India

Sat Dec 10, 2005 2:11 am

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.
 
LAXDESI
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RE: Airbus Estimates 1000 Planes Demand From India

Sat Dec 10, 2005 6:00 am

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

BTW, who is that photograph of?
 
jaysit
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RE: Airbus Estimates 1000 Planes Demand From India

Sat Dec 10, 2005 6:14 am

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?
Atheism is Myth Understood.
 
cricket
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RE: Airbus Estimates 1000 Planes Demand From India

Sat Dec 10, 2005 5:32 pm

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,
 
LAXDESI
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RE: Airbus Estimates 1000 Planes Demand From India

Sun Dec 11, 2005 4:12 am

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.
 
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kc135topboom
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RE: Airbus Estimates 1000 Planes Demand From India

Sun Dec 11, 2005 4:32 am

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.
 
LAXDESI
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RE: Airbus Estimates 1000 Planes Demand From India

Sun Dec 11, 2005 4:37 am

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
 
comorin
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RE: Airbus Estimates 1000 Planes Demand From India

Sun Dec 11, 2005 5:43 am

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 
 
LAXDESI
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RE: Airbus Estimates 1000 Planes Demand From India

Sun Dec 11, 2005 7:21 am

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.
 
ikramerica
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RE: Airbus Estimates 1000 Planes Demand From India

Sun Dec 11, 2005 7:50 am

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.
 
Halibut
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RE: Airbus Estimates 1000 Planes Demand From India

Sun Dec 11, 2005 10:37 pm

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
6 million Jews were slaughtered-Do you see Jews flying planes into buildings in Germany to kill 1000s of innocent, NO !
 
Gr8Circle
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RE: Airbus Estimates 1000 Planes Demand From India

Sun Dec 11, 2005 11:46 pm

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....
 
LAXDESI
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RE: Airbus Estimates 1000 Planes Demand From India

Mon Dec 12, 2005 5:51 am

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.
 
TWA902fly
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RE: Airbus Estimates 1000 Planes Demand From India

Mon Dec 12, 2005 5:58 am

...900 of those will be A380s

'902
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jaysit
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RE: Airbus Estimates 1000 Planes Demand From India

Mon Dec 12, 2005 6:05 am

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.
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LAXDESI
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RE: Airbus Estimates 1000 Planes Demand From India

Mon Dec 12, 2005 6:06 am

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

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

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