Waiting for takeoff

New Delhi: In the last two years, Airbus has not bagged a single order from India, and it is unlikely to do so this year. It delivered over 40 aircraft in 2008, 29 in 2009 and expects to hand over not more than 19 in 2010. The reason is that the aviation sector has taken a severe beating. The economic slowdown, the price wars and high fuel prices caused huge losses in the books of all carriers. It is only in the last one or two quarters that things have started to improve. Traffic has picked up, prices have stabilised and losses have begun to come down. But it is still a far cry from the halcyon days when Indian carriers were placing orders that ran into billions of dollars left, right and centre.
Airbus Executive President (marketing & contract) and President (India) Kiran Rao remains bullish on India. “The forecast of 1,000 new aircraft (worth $105 billion) for India in the next 20 years is still pessimistic,” says he. To put it in perspective, there are 440 aircraft in the Indian skies at the moment; 223 of these, or almost 51 per cent, are from Airbus. Rao expects carriers to place orders one more time in 2011. “The market,” he says “bottomed out in terms of complexities and difficulties in 2009. Carriers no longer talk about deferment of orders.”
According to Rao, no Indian carrier has so far cancelled its order, though 2009 saw record cancellations for Airbus worldwide. (He claims Airbus is sitting on 68 per cent of all future orders). But some orders have been postponed, and some orders have been restructured — carriers have switched to smaller aircraft. Kingfisher, for instance, has gone for A330s instead of long haul A340s. This has helped it cut its losses. Industry experts say the losses on long routes can be as high as $1 million a day. The number of such switches or deferred orders is not known. On a global scale, Airbus officials say that in 2009, the company shifted as many as 600 aircraft to earlier or later slots.
30/03/10 Bhupesh Bhandari/Business Standard

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Categories: Foreign Mar 2010, Indian Aviation- In General Mar 2010