India’s Booming Airline Industry

Olivier and Mann - India’s Booming Airline Industry
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Olivier and Mann

Commercial airline companies in India have ordered around 850 aircraft, costing about $85 billion in the past few years, however, the number of new aeroplanes will still not keep up with demand, said Spice Jet Ltd.

SpiceJet ordered over 200 aircraft from Boeing in January this year, amounting to $22 billion, and the purchase will still not be enough, according to the company’s chairman. The desire to fly for Indians will continue to rise as prosperity spreads into the rural areas of the country.

India is currently the fastest developing aviation market and competition between aircraft manufacturers is fierce as an increasing number of first-time flyers amongst the middle-class start taking to the skies.

The country needs to have a well-developed infrastructure, according to industry players, and most of the country’s growth is not happening in leading cities like Mumbai and Delhi but progress is presently being seen in 2nd and 3rd tier towns.

The Indian government has offered to provide funding for some of the losses of the country’s aviation companies and to cover part of the landing and parking fees should they provide services to parts of India that are off the beaten path. India’s premier also promised to restrict the cost of flights to encourage demand in the least used terminals, which make up around 80 percent of India’s total airports.

SpiceJet decided to temporarily stop its operation in 2014 due to financial difficulties, the company currently has various alternatives to fund its aircraft purchases which include possible funding by America’s Export-Import Bank or sale-and-leaseback agreements.

Indigo is the country’s leading airline and is now waiting for its 430 Airbus planes to be delivered, on top of its previous order of 100. The purchase will give the company the largest fleet of A320neo jets anywhere. Go Airlines India Pvt is also waiting for its order of 144 A320neo jets to be delivered.