If RCS is successful, passenger growth will be impressive: Dinesh Keskar

India and China are good growth stories, but China is way ahead, said Dinesh Keskar

Boeing expects India’s aeroplane market to grow significantly, as the market expands. Last month, it won a $22-billion order for 100 Boeing 737s from low-cost carrier Spicejet, narrowing its gap with rival Airbus. Passenger growth at 23 per cent is unprecedented when global growth is only five per cent, Dinesh Keskar, senior vice-president, Asia Pacific and India sales for Boeing Commercial Airplanes, tells Alnoor Peermohamed and Raghu Krishnan.

Edited excerpts:

What is your expectation of the Indian aviation market?

We continue to see a plan by the government to enhance infrastructure. We continue to see unprecedented passenger growth — 23 per cent is unthinkable. People will be happy with three-four per cent, the world is growing at five per cent, right? We didn’t factor in the regional connectivity scheme (RCS) because we want to see how long it takes. Every new project has its challenge.

Have you factored in smaller planes in your forecast?

We typically focus on 150 seats and up. But, we may focus on smaller planes because of RCS.

What will happen if RCS becomes a reality?

It will be a positive. Because if RCS becomes a reality, the secondary and tertiary airports become important and new growth factors will come into play. When more people fly, a 90-seater airplane will give way to a 150-seater plane, which is a Boeing or an Airbus. Then, the 90-seater plane will go to a smaller place and built a new route, because we have no shortage of routes. We still have 70 undeveloped airfields. So there’s a lot of potential.

You’ve seen the market grow in China. How similar is it to India?

India and China are good growth stories, but China is way ahead. China is a much bigger country. In 2.5 hours, you’re pretty much out of India. But fly for five hours and you’re still within China. Plus, the population of China is more than India’s. And they started their growth story much earlier. They started their liberalisation much earlier and, more important, most of their airlines are owned by the government. So they built infrastructure first and then grew. Whereas in our case, we just grow, grow, grow and when it is bursting at the seams, like at the Mumbai airport, then we say let’s build the Navi Mumbai airport. Both ways have generated impressive numbers. But in that model because they have a lot of money, they can pull it off. I remember in China 15 years ago, they were ready for the next 25 years of growth. If you do that in India, growth here will be much faster.  

What’s your take on fuel prices?

Fuel prices have gone up 50 per cent in 12 months. But it’s not alarming yet. If it goes over, say, another $10-15 a barrel, we’re going to have to see how airlines cope. 

Is airport infrastructure hampering growth in India?

Unless there is infrastructure enhancement, you just can’t put more flights. What is infrastructure enhancement? The number of flights you can land, actual runways and use of modern techniques. These are the things the government is looking into. 

Another way to increase capacity is instead of running a plane for 11 hours a day, you run it for 13 hours a day. That’s how growth is happening. This is what we study and that’s what our data is about.