Global aviation giants still eye $300 bn India potential

November 7th, 2008 - 1:43 pm ICT by IANS  

New Delhi, Nov 7 (IANS) Despite daily losses of Rs.100-150 million ($2-3 million) being incurred by some Indian carriers due to the general economic downturn, global aerospace giants continue to make a strong pitch for a share in the country’s aviation pie, officially estimated at $300 billion by 2020, experts said.”Much of the world is flat or declining. Only India is growing,” said Daniel J. Magoon, director of Indian business development, transportation and security solutions with the US aerospace giant Lockheed Martin.

“We want to become the supplier of choice for air traffic control and security systems,” Magoon told IANS, adding his job was to change the company’s business mix in India from major supplier of wares to the defence sector to gaining a foothold in the civil aviation space.

India’s flight penetration is at a mere 0.2 per capita, compared to 2.2 in the US and 1.2 in China, and with only 40 busy airports serving a population of more than a billion, companies like Lockheed sees a huge growth potential here.

And it was none other than Civil Aviation Minister Praful Patel, who said in Hyderabad recently during a major civil aviation show that India offered a $300 billion market by 2020 for new aircraft, infrastructure and air traffic control, navigation and security systems.

“The entire world now thinks India is the place to grow and we are very much focussed on the Indian market as our business here can grow to as much as $1 billion in the next few years,” said Fred A. Treyz III of another US giant Raytheon.

“China may be growing too but most American aviation companies who also have a presence in the defence sector are not allowed to do business with Chinese companies, so we have to focus on India,” said Treyz who is the company’s director of business development and strategic planning.

As aviation infrastructure suppliers slug it out for the Indian market, aircraft makers, too, see India as the place to grow. Bell Helicopter, for example, took 52 years to sell its first 100 choppers in India, but now expects to sell the next 100 in less than five years.

“India is our fastest growing market,” says Greg Hubbard, director of communications for Bell Helicopter, which claims a 52 percent market share in the chopper market, followed closely by Franco-German-Spanish Eurocopter with 40 percent.

“We believe that the helicopter market in the country has the potential of doubling in the next few years,” said Norbert Ducrot, Eurocopter’s senior vice president for sales and marketing in Asia.

India is also a hot market for corporate and business jets. Outside the US, India is the second-largest market after Brazil for Hawker Beechcraft, said Sean McGeough, the company’s vice president of international sales.

Despite being a little slow to take off, Montreal-based Bombardier, another leading manufacturer of business jets, now has three sales representatives in India and will also set up a regional customer support office for the sub-continent next year.

“The potential for Bombardier as a regional carrier in this market is vast and it is our hope and expectation to build on that in the months and years to come,” Bombardier’s senior adviser John Arnone told IANS recently.

But what about the current troubles of Indian carriers? The two major commercial aircraft manufacturing giants Airbus and Boeing think it is a temporary aberration and will soon correct itself.

“There is now too much overcapacity but the potential for growth in India is huge,” says Kiran Rao, European aircraft giant Airbus’s executive vice-president of sales and marketing.

“If the Indian economy is growing at 7-8 percent, then air traffic growth will be 14-15 percent. So we are very much focussed on India,” he said.

This perception is also shared by Dinesh A. Keskar, Boeing’s senior vice president of sales of commercial airplanes.

“India is the growth story of the world and it is going to be the future,” he said.

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