Latest News | India to Be World's Most Significant New Aircraft Mkt: Barclays

New Delhi, Jun 1 (PTI) With one of the highest traffic growth rates in the world, India is the focal market for the global aerospace and defence industry and the world's most significant new aircraft market, Barclays said in a report.

India is currently the third largest aviation market in the world, only behind the US and China, in terms of domestic traffic.

Also Read | Hydrogen-Powered Toyota Corolla Race Car Introduced As Auto Racing Makes Its Shift Away From Fossil Fuel Guzzlers.

"The growing middle-class population with an increased propensity to travel stimulated by a government initiative through the UDAN Regional Connectivity Scheme has made India a key source of demand for new aircraft," the brokerage said.

Indian carriers have the second-largest order book behind the US. India currently takes 7 per cent of all Boeing and Airbus deliveries, and the country is seen taking nearly that proportion over time as annual traffic growth is forecast to remain 200 bps above the long-term global average.

Also Read | Greenland Glaciers and Ice Caps Are Melting Three Times Faster Than 20th Century, Finds Concerning Study.

"With important fleet decisions to make by IndiGo, Akasa Air, Jet Airways, the battle for market share is likely to continue. Any wins in the Indian market will ensure a permanent stream of delivery at a time when the share of China compared to the last decade is expected to decline with the recent entry into service of Comac's C919," it said.

The importance of India to future aftermarket can be seen in the fact that it accounts for 10 per cent of the GTF (geared turbofan) and Leap engines installed fleet compared to 1 per cent for the previous V2500 and CFM56 engines generation.

"India is a focal market for the global aerospace and defence industry," Barclays said. "With domestic traffic growth of 11 per cent CAGR (Compound Annual Growth Rate) between 2006 and 2019 and annual traffic growth forecast to remain 200 bps above the long-term global average, Indian carriers have ordered more than 1,400 aircraft between 2009-22. Indian carriers now have the second-largest order book, with a share more than 6 per cent of the industry backlog, behind only the US."

It said the importance of India to future aerospace financial performance can also be seen in the fact that it accounts for 10 per cent of the GTF and Leap engines installed fleet (these engines are installed on A320neo and MAX planes) compared to 1 per cent for the previous V2500 and CFM56 engines generation (installed on the A320ceo and 737NG).

In Defence, India's total defence spend of USD 81.4 billion was globally the fourth largest in 2022, after the US, China, and Russia. India has been the biggest importer of defence equipment (ahead of Saudi Arabia), accounting for 11 per cent of global military equipment imports over 2018-22.

"With the fleet of Indian carriers skewed toward narrow body, we view Airbus as better positioned than Boeing, driven by the A320 family's competitive position.

"Specifically, Airbus has won 65 per cent of orders from Indian carriers since 2009 and accounts for 74 per cent of India's backlog share," it said.

The challenge lies in near-term production ramp-up execution, including the availability of the GTF engine.

"India's defence spend has seen an increasing upward trajectory, a 9 per cent-plus CAGR over the last two decades, and we expect demand to remain elevated given the rise in China's military spend," it said, adding, an analysis of Indian military equipment indicates a critical need for more fighter jets for the Indian Air Force.

With dependence on Russia on the decline and two squadrons of Rafale fighters, it saw Rafale as well positioned for additional orders on top of the Marine variant order expected to be finalised later in the year for the Navy (26 jets).

(This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)