Indian carriers will require 1,450 new aircraft worth $175 billion to cope with the growth in passenger traffic over the next 20 years, global aircraft manufacturer Boeing said Tuesday.
"Over 60 million passengers will fly within India this year. Over the next 20 years, India is projected to have the highest passenger traffic growth in the world," said Dinesh Keskar, senior vice president of sales, Asia Pacific and India, Boeing Commercial Aircraft, releasing the company's current market outlook.
"The forecast passenger growth is expected to be driven by economic prosperity, higher discretionary incomes and business progress."
And airlines in the country will require 1,450 new aircraft worth $175 billion to service the traffic growth.
According to Keskar, the biggest demand from the airlines in India will be for single-aisle aircraft, which Boeing estimates to be around 1,201 units at a cost of $114 billion.
Boeing also projected a demand for 234 twin-aisle aircraft from 2012 to 2031 worth $61 billion, followed by a demand for 15 regional jets worth $0.5 billion.
Keskar further said that airlines in India are improving their financial performance due to increased yield and capacity management. However, a slowdown in the economy, high fuel prices and weak rupee could affect the margins.
"Their is a slight more supply than demand. But this is not a matter of major concern as the airlines have been improving their performance by better capacity management," Keskar said.
Globally, the aircraft manufacturer projected sales of 34,000 airplanes worth $4.5 trillion in the next 20 years. The company also forecast an annual traffic growth of 5.00 percent over the next 20 years and by that time the world's commercial aviation fleet will double.
Meanwhile, European aircraft manufacturer Airbus in its latest global market forecast (GMF) said that their will be a need for some 28,200 passenger and freighter aircraft between 2012 and 2031 worth nearly $4.00 trillion.
"Aside from growth in international traffic, by 2031 four of the world's biggest traffic flows will all be domestic - US, China, Intra-Western Europe and India, and these account for a third of world traffic," says John Leahy, chief operating officer, customers, Airbus.
The report predicted that in value of orders terms, India will be the fourth largest market after China, US and UAE.
"By 2031 the world's passenger fleet will have expanded by 110 percent from slightly over 15,550 today to over 32,550. In the same period, the world's freighter fleet will almost double from 1,600 to 3,000 aircraft," the report said.
The report added that traffic will grow at an average annual rate of 4.7 percent in the next 20 years, during which some 10,350 aircraft will be replaced by new efficient models.