The president of Boeing India, Dr Dinesh Keskar, said that the passenger fares need to be hiked by 15 percent to sustain the aviation industry. He was speaking at the India Aviation 2012 fair on Wednesday at the Begumpet airport.
“Air traffic growth is the fastest in India at 8 per cent. This is not a profitable growth rate and not good for the sector. The profits are reducing due to increasing fuel prices and unstable exchange rates. The scenario is the same everywhere in the world,” Mr Keskar said. “The fares need to be adjusted. An increase may affect the number of passengers as they may choose to travel by train and resort to discretionary air travel,” he added.
He pointed out that aviation fuel cost Rs 70,000 per kilo tonne two-and-a-half years ago and later it was reduced to Rs 30,000, but now it is back to Rs 65,000. “In 2008, airlines were losing Rs 1,000 per passenger on their Delhi-Mumbai flights. After gaining `500 per passenger later, they again began to lose more than Rs 500 per passenger by December 2011,” he said.
“Managing air fares, fuel price and a stable exchange rate can help the industry recover. I am bullish about the growth of the industry. Domestic air passenger traffic is increasing. It was around 60 million in 2010 and is expected to grow to 69 million in 2012,” Mr Keskar said. “The future growth will be in the Asia Pacific and West Asia. The scenario looks better in these regions in comparison to the United States and the European countries. In the next 20 years, airlines in the world will need 33,500 new airplanes valued at four trillion dollars. India’s airlines will need 1,320 new airplanes valued at $150 billion,” he said.
Dr Dinesh Keskar said that Boeing will start its Maintenance Repair Overhaul facility at Nagpur a month ahead of schedule.
He said, “We will complete the Maintenance Repair Overhaul facility by November. The facility was to be completed in December. The Mainte-nance Repair Overhaul facility has been set up with an investment of $100 million and will be able to handle one Boeing 777, 787 or 747 aircraft or three 737’s simultaneously.”