Indian carriers buying 138 Boeings; may buy 856 planes in 5 years

By Arun Kumar, IANS

Seattle : Indian air carriers are buying 138 planes from the Boeing Co., including 37 of its latest offering, the Boeing 787 Dreamliner, with an eye to recapture the market share they have been losing to foreign airlines.

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India's national flag carrier Air India has placed a $11.6 billion order – its biggest ever – for 68 planes, 27 of them 787s. Jet Airways has ordered 30 Boeings, including ten Dreamliners. The Sahara unit recently bought by Jet Airways has ordered ten more planes. Domestic low cost airline SpiceJet is also buying 30 Boeings.

Even the Indian Air Force may opt for 10 Boeing-BJ 737 for its VVIP squadron.

One common factor in their decision is the economy offered by Boeing planes. For instance the Long Range Boeing 777-200LR will help Air India save two million gallons of fuel per year over an A340-500 Airbus, according to Dinesh A. Keskar, Boeing's senior vice president sales for commercial airplanes.

"India has arrived", he said, noting that in the next five years Boeing is hoping to sell 856 aircraft worth $72 billion to India whereas five years back it had projected sales of no more than 300 aircraft costing $20 billion.

Boeing also plans to invest $185 million in a joint venture with Air India as part of its 68 plane deal. The proposed joint venture to be set up at Nagpur will offer maintenance, repair and overhaul (MRO) facilities for Boeing 777 and 787 aircraft to third parties, according to Air India chairman and managing director Vasudevan Thulasidas.

Like Thulasidas, who was here for the Sunday roll out of the Dreamliner, Jet Airways chairman Naresh Goyal said his airline had chosen the 787 because of the overall reliability and excellent economics. "It's a great airplane".

Suggesting an alliance with Air India, he said such cooperation between the state-run and private airline could help Indian carriers capture half of the market share of traffic in and out of the country.

"India's market share has been less than 20 percent of the total traffic in and out of India. All other foreign airlines carry over 80 percent and it will become more," Goyal said. "If we don't do something it will go down to ten percent," as foreign carriers are taking advantage of India's open skies policy.

The response from Air India to his proposal was positive, he said. "We have agreed that the new merged Air India and Jet Airways must cooperate, not just go to alliances. Why can't we have an alliance within India?" Goyal asked, noting that it would help both the airlines and above all the country.

Besides ten 787s that will start joining the Jet fleet in 2011, Jet Airways has also placed an order for 10 Boeing 777, the long-range aircraft with two of these planes joining the fleet this month.

Outlining an ambitious agenda for his airline, Goyal said the Boeing 777s will be put on the North America route with a Mumbai-Newark (New York) flight via Brussels starting Aug 5. Turning Brussels into a major hub, Jet plans to substantially increase the number of flights to US within a year.

Proposed routes include the Chennai-Los Angeles sector and a Mumbai-San Fransisco flight via Shanghai. "Washington DC is also on my radar," Goyal said.