India aviation sector's growth may drop to 12% in 2018, says Boeing

The Indian aviation sector could see a drop of 12 per cent in its growth rate due to the rising jet fuel prices, a senior official of aerospace major Boeing said on Thursday.

Domestic air traffic has shown a consistent growth of 20 -25 per cent throughout 2015 and 2016. However, the domestic travel demand petered out and stayed under 20 per cent in 2017.

"We think the growth rate will be around 12 per cent. The reason I have scaled down is due to the oil prices. We are seeing it touch high 60s (oil price in dollars per barrel). It is the highest in four years and it has gone up by 60 per cent in the last 8 months," said Dinesh Keskar, senior vice president of sales Asia-Pacific and India at the Boeing Commercial Airplanes.

He told reporters at an event that though there could be the impact of an increase in the jet fuel prices, it could be offset due to a stronger rupee.

Boeing had earlier said that India is expected to take deliveries of 2,100 new planes worth $290 billion in the next 20 years, and therefore, account for more than 5.1 per cent of the total global demand of 41,030 aircraft.

Keskar reiterated that Boeing's forecast of 2,100 airplanes for the country is "somewhat constrained" due to infrastrucural limitations of Indian airports.