22407941 the Commercial Aircraft Market in India to 2023 Market Brief

8/12/2019 22407941 the Commercial Aircraft Market in India to 2023 Market Brief

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Reference Code: DF2316MB

Publication Date: July 2013

The Commercial Aircraft Market in India to

2023: Market Brief


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TABLE OF CONTENTS

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TABLE OF CONTENTS

1 Introduction ........................................................................................................................... 5

1.1 What is this Report About? ................................................................................................................5

1.2 Definitions .........................................................................................................................................5

1.3 Summary Methodology .....................................................................................................................5

1.4 About Strategic Defence Intelligence .................................................................................................7

2 Indian Market Size and Forecast 20132023 ....................................................................... 8

2.1 Expenditure on the single-aisle segment driving the Indian commercial aircraft market...................11

2.2 Twin-aisle expected to constitute the second largest market share .................................................12

3 Appendix .............................................................................................................................. 13

3.1 Methodology ...................................................................................................................................13

3.2 About SDI........................................................................................................................................13

3.3 Disclaimer .......................................................................................................................................13


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TABLE OF CONTENTS

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LIST OF FIGURES

Figure 1: Commercial Aircraft Market in India (US$ Billion), 20132023 ...................................................................................................................... 9Figure 2: Commercial Aircraft Market Split by Sector in India (%), 20132023 .......................................................................................................... 10

Figure 3: Single-Aisle Aircraft Market Size in India (US$ Billion), 20132023 ............................................................................................................ 11

Figure 4: Twin-Aisle Market Size in India (US$ Billion), 20132023 ........................................................................................................................... 12


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TABLE OF CONTENTS

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LIST OF TABLES

Table 1: Indian Commercial Aircraft Market Overview ................................................................................................................................................... 8Table 2: Key Indian Commercial Aircraft Procurement Programs ................................................................................................................................. 9


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INTRODUCTION

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1 Introduction

1.1 What is this Report About?

This report offers detailed analysis on the market size and forecast of the global commercial aircraft market for

India over the next ten years, 20132023.

1.2 Definitions

For the purposes of this report, the following timeframes apply:

Forecast Period: 2013 to 2023

The following are definitions of categories:

Single aisle aircraftrefers to aircraft that usually seat 90-220 passengers with a typical width of 3-4

meters and seat arranged 2-6 abreast along a single aisle

Twin aisle aircraft refers to aircraft that usually seat more than 220 passengers with a typical width

of 5-6 meters and seat arranged 7-10 abreast

Cargo aircraft refers to aircraft designed for the carriage of goods featuring one or more large doors

for loading cargo

Regional jets refer to aircraft that usually seat 34-89 passengers and are used for shorter distance

flights not allowing transcontinental flights

Business jets refer to aircraft that usually seat upto 20 passengers and normally known as corporate

jet, executive jet or VIP transport jet

1.3 Summary Methodology

Strategic Defence Intelligences (SDI) dedicated research and analysis teams consist of experienced

professionals with a background in industry research and consulting in the defense sector. The market size is

derived by consolidating ongoing procurement programs, modernization initiatives, and future procurement

plans, utilizing information gathered through primary and secondary sources. Forecasting is conducted based

on the lifetime of current inventory levels, suitability/need of the weapon category for a specific country, budget

availability, and opinion of leading industry experts. The following research methodology is followed for all

databases and reports:


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INTRODUCTION

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Secondary Research

The research process begins with exhaustive secondary research to source reliable qualitative and

quantitative information related to the commercial aircraft market. The secondary research sources that are

typically referred to include, but are not limited to:

Globally renowned think tanks

Industry associations

National government documents and statistical databases

Company websites, annual reports, financial reports, broker reports, and investor presentations

Industry trade journals and other literature

Internal and external proprietary databases

News articles, press releases, and webcasts specific to the companies operating in the market

Primary Research

SDI conducts hundreds of primary interviews a year with industry participants and commentators in order to

validate its data and analysis. A typical research interview fulfills the following functions:

Provides first-hand information on market size, market trends, growth trends, competitive landscape,

and future outlook

Helps to validate and strengthen secondary research findings

Further develops the analyses teams expertiseand market understanding

The participants who typically take part in such a process include, but are not limited to:

Industry participants: CEOs, VPs, business development managers, market intelligence managers,and national sales managers

External experts: investment bankers, valuation experts, research analysts, and key opinion leaders

Conventions

Currency conversions are performed on the basis of average annual conversion rate format

calculations

All the values in tables, with the exception of compounded annual growth rate (CAGR) are displayed

to one decimal place. Growth rates may, therefore, appear inconsistent with absolute values due to

this rounding method


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INTRODUCTION

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1.4 About Strategic Defence Intelligence

This report is one of a series available to subscribers of our premium research platform, Strategic Defence

Intelligence. Strategic Defence Intelligence provides a stream of continuously updated customer and

competitor intelligence, as well as detailed research reports providing an unrivalled source of global

information on the latest developments in the defense industry.

Strategic Defence Intelligence's unique monitoring platform tracks global defense activity for over 2,500

companies and 65 product categories in real time and in a highly structured manner, giving a comprehensive

and easily-searchable picture of all defense industry activity. The site features: daily updated analysis,

comment and news, company and customer profiles, defense spending, tenders and contracts, product and

technology intelligence, a research and analysis database providing access to industry and competitor reports

to enable business and market planning, and fully customizable tools, including instant personalized report

generation and custom alerts.


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INDIAN MARKET SIZE AND FORECAST 20132023

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2 Indian Market Size and Forecast 20132023

India is expected to be the second largest spender on commercial aircraft in the Asia Pacific region during theforecast period, after China. Major manufacturers including Boeing, Airbus and aviation associations such as

IATA indicate India as one of the main growth engines for the Asia-Pacific commercial aircraft market. This

can be attributed to the countrys rapid economic growth and its stable GDP growth rates. Indias large

population is also considered a significant factor driving this industry, owing to the expanding middle class and

the rising disposable income among this class. A recent survey has shown that out of every three individuals

in India, two are willing to travel via a low cost airline; evidence that the need for air travel in India has

increased tremendously during the last five to six years. The immediate need of the countrys airline

companies is to have fuel efficient and economic airplanes that can be used for short- and long-haul routes.

Until very recently, the airline companies in India faced numerous regulations to procure and induct aircraft to

their fleets. They had to acquire approval from the Aircraft Acquisition Committee (AAC) as a part of the

process, which had resulted in tiresomely delaying the procurement. In a recent development, the Indian civilaviation ministry scrapped the AAC as a step towards liberalization in the civil aviation sector; a crucial

development that is expected to bolster aircraft procurement. The Indian civil aviation sector is also

undergoing significant consolidation in the form of joint ventures and foreign direct investment. For example,

Air Asia, a Malaysian low cost airline, and TATA Group from India are launching a new airline in a joint venture

in June 2013. Additionally, Etihad, an Abu Dhabi airline, is also in talks to buy stakes in the Indian company

Jet Airways. This significant growth in the industry is expected to keep the commercial aircraft procurement on

a fast pace in India. However, the recent suspension of operations by Kingfisher Airlines due to bankruptcy is

expected to result in considerable cancellation of aircraft orders with manufacturers.

The single-aisle segment possesses a dominating market share in the Indian commercial aircraft market with

the remaining constituted by twin-aisle aircraft and business jets. This is due to the significantly increasing

domestic operations by the countrys airline companies in a bid to increase connectivity between the metrosand other smaller cities. Air India, the state owned airlines company, is investing significantly in the twin-aisle

segment in a bid to operate on long-haul routes and achieve better economy while providing increased

comfort. Indiascommercial aircraft market values US$5.9 billion in 2013 and is anticipated to grow at a CAGR

of 7.95%, to reach US$12.8 billion by 2023. The cumulative market during the forecast period is expected to

value US$113.4 billion.

The table below gives a brief overview of the Indian commercial aircraft market:

Table 1: Indian Commercial Aircraft Market Overview

Particulars Market in 2013 Market in 2023Total Market

(2013

2023)

Annualizedgrowth/decline

(20132023)

Single-Aisle US$4.7 billion US$9.7 billion US$82.5 billion 7.56%

Twin-Aisle US$900 million US$1.7billion US$20.9 billion 6.57%

Business Jets US$400 million US$1.45 billion US$10 billion 13.74%

Total Commercial Aircraft Market US$5.9 billion US$12.8 billion US$113.3 billion 7.95%

Source: SDI analysis SDI


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The chart below shows the commercial aircraft market size in India during 20132023:

Figure 1: Commercial Aircraft Market in India (US$ Billion), 20132023


During the forecast period, the single-aisle planes segment is expected to hold 72.8% market share, followed

by the twin-aisle and business jets segments with 18.4% and 8.8% respectively.

The table below shows the key Indian commercial aircraft procurement programs:

Table 2: Key Indian Commercial Aircraft Procurement Programs

Program/EquipmentName

Equipment TypeQuantityProcured

Supplier/Country Delivery PeriodTotal Contract

Value

787-9 Twin aisle aircraft 21 Boeing NA US$5 billion

737 Single aisle aircraft 60 Boeing NA US$5.4 billion

A320 Single aisle aircraft 72 Airbus 2013-2019 US$7.2 billion

A320 Single aisle aircraft 180 Airbus 2014-2023 US$12 billion

787 Twin aisle aircraft 10 Boeing 2016 onwards US$2.4 billion


6.0

8.4 9.2

10.5 11.1

10.511.4

10.4 11.2

12.0 12.8

0

2

4

6

8

10

12

14

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

US$Billion


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The chart below shows analysis of the sectors within the commercial aircraft market in India (%) during 2013

2023:

Figure 2: Commercial Aircraft Market Split by Sector in India (%), 20132023


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71 71 68 66 73 73 76 75 76 75

1523 23 26 27

19 18 14 13 13 13

7 6 7 7 7 9 9 11 11 11 11

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Single aisle aircraft Twin aisle aircraft Business jets


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2.1 Expenditure on the single-aisle segment driving the Indian commercial aircraft market

The Indian civil aviation sector is currently in a blooming state with numerous airlines trying to cash-in on the

opportunity to bridge the gap of providing the travelers with affordable air travel. Numerous low cost carriers

including IndiGo, GoAir, and Spicejet have advanced in starting operations between various destinations

within the country during recent years. This increased operation in short-haul routes and the gradually

increasing frequency of flights are boosting the demand for single-aisle aircraft in the country. The European

manufacturer Airbus had recently announced that India is a substantial driver for the companys sales growth

in Asia-Pacific. In 2012, IndiGo, an Indian budget airline, placed the largest ever order in commercial aviation

history with Airbus for the delivery of 180 A320jets. This mega deal is expected to be worth up to US$15.6

billion. Furthermore, the establishment of new airlines by Air Asia and TATA Group in June 2013 is expected

to bolster the demand for single-aisle aircraft in the country during the forecast period. According to the

estimates of Boeing, India is expected to require approximately 1200 single-aisle aircraft during the next 20

years. The total market size for the single-aisle segment amounts to US$4.6 billion in 2013 and is expected to

grow at a CAGR of 7.56%, to reach US$9.6 billion by 2023, with a cumulative spend of US$82.5 billion duringthe forecast period.

The chart below shows the single-aisle aircraft market size in India (US$ billion) during 20132023:

Figure 3: Single-Aisle Aircraft Market Size in India (US$ Billion), 20132023


4.7

5.9 6.5

7.1 7.3 7.7

8.3 7.9 8.5

9.1 9.7

0

2

4

6

8

10

12

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

US$Billion


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2.2 Twin-aisle expected to constitute the second largest market share

The two major carriers that are currently operating twin-aisle aircraft in the country include Air India and Jet

Airways. These airlines are currently operating a range of wide-bodied aircraft including Boeings 777s, 747s,

and 787s as well as Airbus A330s. Air India has not achieved the required profitability using its old twin-aisle

aircraft due to high costs. However, with its new Boeing 787s inducted into the fleet, the state owned company

is expected to achieve significant profits by operating on long-haul routes to international destinations. The

Boeing 787 aircraft is expected to revolutionize the industry due to its supposedly high fuel economy rates and

environment friendly nature. Additionally, Etihad is buying a minority stake in Jet Airways which is expected to

help in the latters expansion both domestically and internationally. Jet Airways has ordered 10 Boeing 787

aircraft to strengthen its long-haul aircraft fleet substantially, which are expected to be delivered to the

company from 2016.

In a bid to liberalize the sector, the Indian civil aviation ministry is taking several steps such as the scrapping of

AAC and loosening the bilateral cooperation agreements with strategic countries. This is expected to result inan increased influx of foreign airline companies expanding into the Indian market bolstering the international

travel market. Therefore, aircraft manufacturers are expected to sign more orders for twin-aisle aircraft during

the forecast period. The total market size for the twin-aisle segment values US$900 million in 2013 and is

expected to grow at a CAGR of 6.57%, to reach US$1.7 billion by 2023, with cumulative spending of US$20.9

billion during the forecast period.

The chart below shows the twin-aisle market size in India (US$ billion) during 20132023:

Figure 4: Twin-Aisle Market Size in India (US$ Billion), 20132023


0.9

2.0 2.1

2.73.0

2.0 2.1

1.4 1.5 1.6

1.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

US$Billion


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APPENDIX

3 Appendix

3.1 Methodology

SDIs dedicated research and analysis teams consist of experienced professionals with an industry

background in marketing, market research, consulting and advanced statistical expertise.

SDI adheres to the Codes of Practice of the Market Research Society (www.mrs.org.uk) and the Society of

Competitive Intelligence Professionals (www.scip.org).

All SDI databases are continuously updated and revised.

3.2 About SDI

SDI is a full-service market research agency and premium business information provider, specializing in

industry analysis in a broad set of B2B and B2C Market. Our products and services help companies to make

better decisions, win business and position themselves more effectively.

SDIs areas of expertise include online research, qualitative and quantitative research, industry analysis,

custom approaches, and actionable insights.

SDI has access to over 500 in-house analysts and journalists, and a global media presence in over 30

professional Market, enabling us to conduct unique and insightful research via our trusted business

communities.

3.3 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any

means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the

publisher, SDI.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please

note that the findings, conclusions and recommendations that SDI delivers will be based on information

gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a

position to guarantee. As such, SDI can accept no liability whatsoever for actions taken based on any

information that may subsequently prove to be incorrect.
http://www.scip.org/http://www.scip.org/

22407941 the Commercial Aircraft Market in India to 2023 Market Brief

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