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Indian Aviation Industry: Experiencing Watershed Moments After the Air India deal, the Indian carriers are expected to place further orders, starting off with another large order from IndiGo. What was envisaged to be a 300 aircraft order prior to COVID, may now increase to 500, predicts CAPA, an aviation consulting and advisory firm

By Shrabona Ghosh

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The Indian aviation sector is set to fly high. With Air India placing a historic order of 470 aircraft from Airbus and Boeing, India is attracting global attention as arguably the most promising aviation market. Thereafter, the Indian carriers are expected to place further orders.

"The Indian carriers are expected to place further orders, starting off with another large order from IndiGo. What was envisaged to be a 300 aircraft order prior to COVID, may now increase to 500," quoted consulting and advisory firm CAPA India in a research note released in February second week.

Largely driven by the strength of the domestic market, which has recovered to 98 per cent of pre-pandemic levels, India's traffic has transitioned from recovery to growth. As a result, Indian airlines will add 7 per cent more supply in the first half of 2023, compared to 2019. Due to the rapid growth of its domestic traffic, 90 per cent of new airplane deliveries to India will be for single-aisle airplanes such as 737 MAX over the next 20 years, Boeing predicted in its analysis.

India may finally emerge as the global aviation market of the 21st century and as a reason needs to induct more aircraft. As of today, the market remains highly under-penetrated.

Although the Air India order is of record proportions, it will basically improve the growth deficit that Air India has experienced in the last decade. "Indian carriers currently have just under 800 aircraft on order of which IndiGo (InterGlobe Aviation Ltd) accounts for 500, which would increase to close to 1,300 with the materialising of Air India order," the CAPA research noted.

Almost every carrier in India is expected to order more aircraft in the next couple of years, for fleet replacement as well as growth. IndiGo had been planning to place a significant order of around 300 aircraft prior to COVID, which was deferred due to the pandemic. This is now likely to proceed, and could be even larger than previously envisaged, increasing to around 500 aircraft now. "In recent months there have been numerous cases of aircraft deliveries being delayed when the airframe was ready, but engines were not available due to supply chain issues. The incidence of such cases is expected to ease by the end of FY2024," CAPA mentioned.

Mark Martin, founder and CEO of Martin Consulting, told The Print, that while the Air India deal is significant in terms of total fleet size, it's not an "earth-shattering" one when considering the sector overall. "This is because, after Kingfisher Airlines and Jet Airways collapsed, the aircraft fleet in India had shrunk by about 250 aircraft in the last 10 years. So, this deal really just replenishes what we had lost. Air India's estimated fleet size is currently about 200 aircraft," he told The Print.

Based on CAPA India's proprietary traffic forecasts for the next decade and beyond, combined with assessment of aircraft retirement cycles, CAPA expects Indian carriers will place orders for around 1,500-1,700 aircraft over the next 24-plus months, starting imminently.

Shrabona Ghosh


A journalist with a cosmopolitan mindset. I lead a project called 'Corporate Innovations' wherein I cover corporates across verticals and try to tell stories on innovations. Apart from this, I write industry pieces on FMCGs, auto, aviation, 5G and defense. 

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