Announcement Tempers Optimism
Just the other day... Aero-News reported on
Boeing's decision to build a maintenance facility in central India.
At that time, Boeing said it foresees the need for more than 850
new commercial aircraft in India over the next 20 years.
So why, then, is Boeing suddenly worried about the financial
well-being of the commercial aviation industry in India?
"The losses in the Indian aviation industry is a cause for
concern. It needs to be checked otherwise that will be a potential
disaster for the industry," Boeing's senior vice president of
commercial plane sales in the region, Dinesh Keskar, told the Press
Trust of India.
Warning about a possible disaster in the making, Boeing says
low-cost carriers are cutting it too close. The fares charged by
LCCs, combined with the rising cost of fuel, mean even though
they're flying record numbers of passengers... the LCCs are losing
The losses are spread across the board -- from Air Deccan, to
SpiceJet, to Jet Air.
"In the next 12 months there
could be consolidation," Keskar said. "They have to increase fuel
surcharges and look at ways of selling seats at differential prices
so that low yields from cheaper ones could be offset by those from
the higher priced seats," he said.
Boeing -- perhaps concerned about losing
potential customers -- has gone on the offensive -- by stating
either fares need to go up... or else there will be a consolidation
in the Indian marketplace. And that wouldn't bode well for Boeing's
substantial order book in the region.
Despite the warning, however, Keskar still managed to sound
"Boeing forecasts a long term requirement for increased
passenger traffic in which airlines significantly add frequencies
with smaller aircraft to meet demands," Keskar said. "We also see a
considerable increase in the air freight market that will need to
support the country's exports, which are growing at an estimated
5-6 percent a year for the next 20 years."