Boeing has reaffirmed its commitment to help airlines in India cope with rising operating costs by offering more cost effective aircraft that are more fuel efficient and have lower maintenance costs.
Dinesh Keskar, Boeing Commercial Airplanes’ senior vice-president of sales for Asia-Pacific and India, made the comment at an industry conference.
“What we are seeing is a constant need for, number one, cost reduction, because the fares [in India] we are paying today to fly from A to B are continuously going lower and lower,” he says. “We have to find ways by which we can create airplanes and create operational economics so that the airlines can still make money in that tough environment. [Because] what happens for the airlines is that fuel prices is something that they can’t control and that is a major component of their cost…”
His comments come as airlines in India are suffering from high fuel costs, which are said to account for 40% of their total expenses.
Stronger fuel prices in 2018 were felt particularly hard in the Indian market, with the double-whammy of a depreciating home currency which further increased fuel and other US dollar-denominated costs. Carriers also struggled to pass on higher costs to passengers, resulting in more strain on their balance sheets.
Market leader IndiGo has also noted that apart from intense competition, fare prices decline closer to the departure date.