LAXDESI
Topic Author
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India Forecast: Boeing-500, Airbus-900 Aircrafts

Tue Mar 21, 2006 1:42 am

Boeing to revise India forecast in June. Currently, there is a large divergence between Boeing forecast of 492 aircrafts and Airbus forecast of 900 aircrafts over the next twenty years(2006 to 2025). IMO, Boeing is being very conservative in its forecast. Here's why:

#For the fiscal year 2004-05, total traffic(domestic & international) was 60 million and growing at 22%. Aviation growth for a developing economy is about a 1.3 factor of GDP growth. Given favourable demographics of India and further liberalization, one can expect the Indian economy to grow at an average rate of at least 7% which translates to a GDP of 4 times the current level by 2025. Applying the multiplier of 1.3 on quadrupling of GDP, total passenger traffic should be about 300 million by 2025.

The current traffic of 60 million is supported by about 225 aircrafts. India would need at least 1000 aircrafts by 2025 to support 300 million passengers. Metro airport expansion/modernisation and new airports at BLR/HYD would be completed by 2025. Expected capacity of five metro airports is expected to be around 250 million by 2025 and a lot of additional capacity at secondary cities will come on-line by 2025.

In summary, Boeing is way off in its forecast for Indian market.


Link:
http://www1.economictimes.indiatimes...ticleshow/msid-1456797,curpg-1.cms

Quotes:
Boeing on Monday said it will revise its forecast for Indian civil aviation market in June and expects the aircraft needs of the country will be definitely less than that of Airbus, its Trans-Atlantic rival. "We will be revising our forecast for the country in June. According to the Airbus forecast, the requirement here is 900 airplanes valued around $90 billion. Its more than triple of our last year forecast...and I believe the actual requirement would be somewhere in between," Boeing Commercial Airplane senior vice president (Sales) Dinesh A Keskar told reporters here.

According to Boeing's last year forecast, Indian carriers will buy 492 aircraft for about USD 36 billion over the next 20 years. Meanwhile, according to Airbus forecast last month, the European airplane maker had said the Indian civil aviation market would need about 900 aircraft valued $90 billion.

[Edited 2006-03-20 18:07:09]
 
CRJ900
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RE: India Forecast: Boeing-500, Airbus-900 Aircrafts

Tue Mar 21, 2006 3:35 am

I think Boeing is wise to be conservative. We live in a turbulent world and everything may have changed by 2025... latest is that some Indian companies are outsourcing work to even-lower-cost countries... perhaps that will curb this amazing growth...?

Perhaps 200-seat A321s and B739s will be the winners on domestic routes...
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LAXDESI
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RE: India Forecast: Boeing-500, Airbus-900 Aircrafts

Tue Mar 21, 2006 8:01 am

Quoting CRJ900 (Reply 1):
Perhaps 200-seat A321s and B739s will be the winners on domestic routes...

Indian and Jagson have ordered A321s. I am surprised Deccan hasn't ordered 321s yet.

Quoting CRJ900 (Reply 1):
latest is that some Indian companies are outsourcing work to even-lower-cost countries... perhaps that will curb this amazing growth...?

that is proof that India is moving up the value chain and strengthens the case for sustained income growth.
 
lehpron
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RE: India Forecast: Boeing-500, Airbus-900 Aircrafts

Tue Mar 21, 2006 8:41 am

I would not trust either forecast unless I was able to see their data and/or methodology; this trend-split crap is getting ridiculus. Companies are in the business of making money, they are not in the business of being objective or to show how things are apart from their view alone. It is about their bottomline, their image, their future and direct customers. The real value of aircraft required is likely in the middle. Except for Tabacco, there are not many industries where companies downplay the needs of their products. I worry for any of you who buy into either Airbus' or Boeing's forecasts. Boeing/Airbus are not going to be objective, so I have trouble trusting them.
The meaning of life is curiosity; we were put on this planet to explore opportunities.
 
Jet-lagged
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RE: India Forecast: Boeing-500, Airbus-900 Aircrafts

Tue Mar 21, 2006 12:17 pm

Boeing serves itself well to project a large market, but not too large, so that it can excite investors whilst not failing to deliver on expected potential sales.

Airbus serves itself well to project as large a market as possible, to secure the most possible funding money from its sovereign sugar daddies.

Their different ownership structures will influence what numbers and outlooks they focus on, to help them both implement their respective strategies.

Perhaps the breakdown of the total is more important to each, as that influences their product strategies and where they put development money and efforts.