India is going to be the key aviation market |

India's airlines made a big splash at this year's airshow. It was like the old days when the ME3 made the big orders. The geography has shifted along with the demand. Speaking with several people at the show, it was clear that the Indian market is not comprehended to the extent you'd expect. To call it big is not even close. India is going to be the key aviation market. Here's a marker. The USA is a mature air travel market. Using rough numbers, there are 50,000 citizens per airliner in the USA. In India, the ratio is 2 million citizens per airliner. Let that sink in for a moment. In other words, doubling India's airline fleet, the ratio is still 20 times that of the USA. It is an incredible statistic. Bob Lange from Airbus pointed out that India's middle class will be larger in the foreseeable future than the US population. That's another eye-popping statistic. You can watch our conversation with Bob Lange here. The information provided so far helps to see those big aircraft orders in context. In other words, the orders we've seen are indeed just the start or, get ready for this, probably too small. But wait, there's more. India is building 100 new airports. This means 100 more communities are connected to the global economy. In one country. Another mind-bending idea, right? Now the normal aviation process is these new airports attract regional air service, and in these normal markets, that means regional jets of under 100 seats. But this is India. Such aircraft don't deliver the seat costs. India is a low-cost market. The kind of regional jet that works in India is an Embraer E195-E2 with all-economy seating. Operators get the seat costs they need, along with up to 146 seats. Embraer agreed with our upbeat view of India. Whereas mature markets like the US use 76-seater regional jets, India needs something twice the size. Boeing Commercial Airplanes VP Darren Hulst forecasts a requirement for 1,810 regional jets below 100 seats over the next two decades, down by 15% from last year’s projection. The regional jet market is upsizing like other segments. Can airlines make other aircraft work? What does an all-economy Max7 or A220 look like in economic terms? The math might be tough to get right and competitive. Boeing will almost certainly be pushing the MAX7 in India. No Indian airline has any of these types on order. Aircraft sales and marketing teams must be salivating at this opportunity. Which leads to the next item. Delivery slots, or more precisely, the lack of them. Indian media asked Airbus if a FAL was planned for India. The right question was asked incorrectly. The question isn't if but when. And the question applies to all three OEMs. Airbus CEO Guillaume Faury said there are no plans, as adding capacity to the existing and well-established FALs is less complex than opening new ones. All three would be smart to start this process ASAP. Why? Because of labor. The global shortage in the aviation supply chain is primarily a labor issue we heard at the Paris show. India has tremendous people resources. The earlier this resource is tapped, the better. Airbus and Boeing are already building their local Indian talent pools. That needs to be expanded. The market's demand for aircraft creates a long tail for parts and MRO business. This is added to the FAL requirements. If Airbus can justify a FAL in Alabama and China, then India is a shoo-in. Besides, look at the production rates of Airbus and Boeing. They can't deliver enough without the exploding Indian market. Both need more production capacity. In our view, India is where that should be placed. Finding local partners for this process is something needing attention right away. What applies to Airbus and Boeing also applies to the supply chain, from engines to everything else. There will be a talent race in India over the next decade as aerospace pivots into the country. Make in India writ large. The skills needed to deliver commercial aerospace products takes time to build. The early movers are going to have a crucial advantage. Welcome to the Indian era.

US Flight Planner - US DoT On-Time Data	Airbus vs Boeing - Official OEM Data
US Airline Schedule Performance - US DoT Data	Daily OEM Production & Deliveries -

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