VISTARA AND JET BUY NEW AIRCRAFT AT FARNBOROUGH
BRITAIN sought to project an image of aerospace prowess long after it leaves the European Union at the Farnborough airshow on Monday (16), as Airbus and Boeing announced a raft of deals and issued optimistic outlooks for the global industry.
India’s Vistara signed a letter of intent to purchase 13 single-aisle A320neo aircraft, while Jet Airways on Tuesday (17) inked a deal with Boeing to acquire 75 latest single-aisle 737 Max aircraft in an agreement valued at $8.8 billion at current list prices.
According to industry data, domestic air traffic in India has grown by almost 20 per cent per annum in the past four years.“The order emphasises Jet Airways’ commitment to the growth and potential of the Indian aviation market,” chairman Naresh Goyal said in a statement.
In June, the Mumbai-based carrier took delivery of its first Max and currently it has two 737 Max planes. It plans to induct a total of 11 such planes in the fleet by March next year.
The second largest airline by domestic market share, Jet Airways has around 120 aircraft in its fleet to serve more than 60 destinations in 15 countries across Asia, Europe and North America.
Indian budget airline Spicejet said it was in talks with aircraft makers over planes that would help its ambitions to fly long-haul, according to the carrier’s chairman on Monday (16).
“We would dearly like to take passengers to Europe and the United States,” Ajay Singh, chairman and managing director of Spicejet, said at an airline panel during the Farnborough Airshow.
“The question is the cost. Can we put enough seats in to get some of the advantages of short-haul low cost? Is there a model out there that we can use?”
“We are exploring that and hope we have some answers soon. We are talking to aircraft manufacturers and let’s see if we can build something out,” he added.
The rise of low-cost long-haul travelling has been led by Asian carriers such as AirAsia, as well as Norwegian Air Shuttle across the Atlantic, although it remains to be seen if it can be profitable in the long run.
Spicejet’s Singh said there was a clear place for low-cost long-haul. “Clearly the market exists from countries like India. In the future, I think this will be the fastest-growing market in the world, especially for medium to long-haul,” he said.
Farnborough, southwest of London, is one of the world’s largest civilian and defence airshows, along with Paris and Dubai. Visitors from almost 100 countries attend the event, which features air displays by civil and defence jets.
Rising demand for various types of passenger planes from emerging economies and the soaring success of no-frills airlines will raise the market’s need over the next two decades, Airbus has forecast.
The plane maker expects almost 37,400 new aircraft, worth $5.8 trillion, will be required to meet global demand over the next 20 years. That was hiked from its 2017 forecast of 35,000 new jets.
On Tuesday (17), Boeing, the world’s biggest planemaker, predicted 42,700 industry deliveries over the next two decades, up three per cent from its estimate of 41,030 a year ago. That would be worth $6.3 trillion at list prices versus last year’s $6.1 trillion forecast.
Boeing’s vice-president of commercial marketing Randy Tinseth told a news briefing that China looked set to overtake the United States as the world’s biggest domestic air travel market in 10-15 years.
This year’s Farnborough show is taking place in the shadow of a trade war between China and the US as well as Britain’s stalled negotiations to exit the European Union.
Airbus, which employs 15,000 people in the UK, has warned it would reconsider investments in Britain if it crashes out of the EU next year with no deal.
Airbus chief executive Tom Enders last month said the government had “no clue” over its Brexit plans.
After prime minister Theresa May unveiled more conciliatory proposals last week for Britain to retain strong trading ties with the EU after Brexit, Enders however said that the government was now “going in the right direction”.
Organisers also warned that aircraft could stop flying if May fails to clinch an adequate Brexit deal with Brussels.
May sought to play down concerns with an optimistic message in her inaugural speech at the show.
“We’re leaving the European Union and forging a new future for our country and, as we do so, want to ensure that the UK remains one of the best places in the world for aerospace companies to do business,” she told participants. (Agencies)
