Indian Airlines Likely To Place Orders For Up To 1,700 Planes In Next 1-2 Years: CAPA

Indian carriers are likely to place orders for 1,500 to 1,700 planes in the next one to two years and Air India is expected to make the first move with a potential order for 500 aircraft, aviation consultancy CAPA said on Wednesday. The total commercial Indian fleet of around 700 aircraft is smaller than some of the world's largest individual airlines, CAPA said, adding that given the immense potential that exists, it stands to reason that there is a need to induct more aircraft.

In a report, CAPA said the Indian market in the post-COVID era is attracting global attention as arguably the most promising aviation market. Almost every carrier in India is expected to order more aircraft in the next couple of years for fleet replacement as well as growth, given that the order book for most incumbent carriers could be considered conservative relative to the growth potential of the market over the next decade and beyond, it said.

In India, air traffic recovery has been amongst the strongest in the world. "Based on CAPA India's proprietary traffic forecasts for the next decade and beyond, combined with our assessment of aircraft retirement cycles, we expect that Indian carriers will place orders for around 1,500-1,700 aircraft over the next 12-24+ months," it said.

While noting that the development of airport infrastructure is continuing and economic regulation is maturing, CAPA said India has long shown promise but has struggled to realise its potential. India may finally be set to take its place as the global aviation market of the 21st century, the report said. CAPA noted that Air India is expected to make the first move, with reports that it will shortly place a historic order for close to 500 aircraft, marking a genuine turning point in Indian aviation.

Air India has been widely reported to be about to place an order for close to 500 aircraft, split between Airbus and Boeing. It could end up being the largest order in the global aviation history, in terms of both the number and value of aircraft which are expected to include a mix from the A320 neo and 737 MAX families, as well as wide-body equipment, CAPA said. Further, the report said that Indian carriers currently have just under 800 aircraft on order of which IndiGo accounts for 500, which would increase to close to 1,300 if the Air India order materialises as expected.

IndiGo had been planning to place a significant order of around 300 aircraft prior to COVID, which was deferred due to the pandemic. This is now likely to proceed, and could be even larger than previously envisaged, increasing to around 500 aircraft now, it said. Indian carriers are thereafter expected to place orders for a further 1,000-1,200 aircraft, starting off with another large order from IndiGo, CAPA said, adding that what was envisaged to be a 300 aircraft order prior to COVID, may now increase to