Indian Airline Fleet Set to Double in the Next Decade According to Avolon

Avolon publishes definitive study on the future of India’s air travel market

FARNBOROUGH, England & DUBLIN--()--Avolon, the international aircraft leasing company, today issued a white paper titled ‘India, a 21st Century Powerhouse’, which provides an in-depth analysis of India’s air travel market. The paper is divided in two parts; the first section details the factors impacting India’s commercial airline sector, while the second part contains an analysis of the Indian aviation market, including a detailed breakdown of the major passenger markets, airline fleets and future growth projections. The White Paper is available from the Avolon website: www.avolon.aero

Key findings of the White Paper include:

  • 22.8 million international passengers were carried by Indian airlines in 2017, an increase of 14% on the previous year;
  • Almost 117 million domestic passengers were carried in 2017, a 17.4% increase on 2016. Annual domestic passenger growth has averaged 15% since 2012;
  • Domestic passenger demand is forecast to grow at an average annual rate of 9.6% over the coming decade, while an 8.3% growth rate is forecast for international passengers;
  • India’s airports handled 295 million passengers in 2017, with the five busiest airports all approaching - or already exceeding - their terminal capacities. Despite significant state and private investment being committed, airport capacity will likely remain a constraint on growth.
  • Low cost airlines carry 65% of domestic passengers and their dominance is set to be maintained into the future, with load factors amongst the highest in the world;
  • Indian airlines currently operate almost 600 passenger aircraft - 75% narrowbody, 11% widebody and 14% regional aircraft. Notably, over 60% of the in-service and committed fleet comprise future technology types;
  • India’s share of the international aviation market has steadily declined to below 40%, reflecting years of under-investment at Air India. Onerous requirements for potential buyers to assume $5bn of debt and guarantee all full-time jobs contributed to no offers being received for Air India in its recent flotation bid;
  • Airline profitability has been improving, but the sector remains vulnerable to fuel prices, interest rates and exchange rate movement. Urgent changes to aviation fuel pricing and taxation are needed;
  • Avolon forecasts that India’s current passenger fleet will double to almost 1,100 aircraft by 2027 – with the total value of aircraft to be delivered over the coming ten years, at current list prices, projected to be $60 billion;
  • After taking account of existing orders, there is a shortfall of 300 aircraft, with a current value of $20 billion, for India’s airline fleet development over the next ten years. This includes requirements for 125 narrowbody jets, 125 widebody jets and 50 large regional aircraft.

Dick Forsberg, Avolon’s Head of Strategy and author of the study, said: “Our thought leadership agenda focuses on assessing the fundamental issues facing the aviation industry and the outlook for domestic and regional aviation markets. This white paper provides a comprehensive analysis of the Indian aviation market and provides forecasts and an outlook for its future development.

While economic and structural barriers remain, India offers an attractive long-term growth market with opportunities in the region significantly outweighing the challenges. Access to domestic and international air travel has never been greater for Indian travellers and an expanding middle class is increasingly taking advantage of the extensive network of domestic routes. However, the international aviation sector in India has been under-developed and, in order to achieve its full potential to support long-term economic growth, trade and tourism, it is imperative that it receives renewed focus and investment.”

ENDS

About Avolon

Headquartered in Ireland, with offices in the United States, Dubai, Singapore, Hong Kong and Shanghai, Avolon provides aircraft leasing and lease management services. Avolon is a wholly-owned, indirect subsidiary of Bohai Capital Holding Co., Ltd., a Chinese public company listed on the Shenzhen Stock Exchange (SLE: 000415). Avolon is the world’s third largest aircraft leasing business with an owned, managed and committed fleet, as of 30 June, 2018 of 890 aircraft.

Website: www.avolon.aero

Twitter: @avolon_aero

Note Regarding Forward-Looking Statements

This document includes forward-looking statements, beliefs or opinions, including statements with respect to Avolon’s business, financial condition, results of operations and plans. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond our control and all of which are based on our management’s current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as “believe,” “expects,” “may,” “will,” “could,” “should,” “shall,” “risk,” “intends,” “estimates,” “aims,” “plans,” “predicts,” “continues,” “assumes,” “positioned” or “anticipates” or the negative thereof, other variations thereon or comparable terminology or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. No assurance can be given that such future results will be achieved.

Contacts

Avolon
Ross O’Connor
Head of Investor Relations
roconnor@avolon.aero
T: +353 1 231 5818
or
Sean Pattwell
Head of Communications
spattwell@avolon.aero
T: +353 1 556 4454
or
Jonathan Neilan
FTI Consulting
avolon@fticonsulting.com
M: +353 86 231 4135

Contacts

Avolon
Ross O’Connor
Head of Investor Relations
roconnor@avolon.aero
T: +353 1 231 5818
or
Sean Pattwell
Head of Communications
spattwell@avolon.aero
T: +353 1 556 4454
or
Jonathan Neilan
FTI Consulting
avolon@fticonsulting.com
M: +353 86 231 4135