With New Logistics Centre, Boeing Expands Footprint In India The move aims to make distribution of replacement parts efficient. This would improve aircraft availability and reduce flight cancellations or grounding due to maintenance issues
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Continuing to expand Boeing's footprint in India, the aerospace major has announced huge investment in creating a new logistics center in India to cater to its regional customers. According to Reuters, Boeing plans to invest about $24 million for setting up the center.
The move aims to make distribution of replacement parts efficient. This would improve aircraft availability for airlines and reduce flight cancellations or grounding due to maintenance issues. In its recent report, Boeing said India will require approximately 2,210 new airplanes over the next two decades of which 1,983 units will be for single-aisle jets, while 227 units or 10 per cent of new airplane deliveries will be for widebody airplanes.
In the initial phase of the operations, the India Logistics Center will focus on supporting airline customers as the civil aviation sector continues to rapidly advance towards becoming the world's third largest passenger market, surpassed only by the U.S. and China. The fleet of Indian airlines is projected to nearly quadruple in size by 2041 compared to 2019. In the second phase, the India Logistics Center will cater to the larger network of Boeing's customers in the region.
"The further expansion of our footprint in India with the India Logistics Center supports our long-term investment strategy for the country. We remain excited and committed as we provide critical service support towards the growth of the Indian civil and defense aviation ecosystem," said Salil Gupte, president, Boeing India in a statement.
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, Boeing forecasts that 90 per cent of new airplane deliveries to India will be for single-aisle airplanes like the 737 MAX over the next 20 years.
"The Indian market is recovering rapidly and its domestic capacity has exceeded 2019 levels, with domestic traffic expected to double by the end of this decade," said Dave Schulte, commercial marketing managing director for Asia Pacific. Indian carriers will outpace global growth at nearly 7 per cent and more than 80 per cent of new airplane deliveries to this market will be for growth, while 20 per cent of new airplanes will be for replacement of aging jets. "This trend exemplifies India's commitment to modernizing its fleet with more sustainable and fuel-efficient next-generation airplanes," added Schulte.
In addition, the India cargo market will also continue to expand over the next two decades to meet demand. The cargo fleet will grow from about 15 airplanes today to about 80 airplanes by 2041.
