The airline sector in India is booming

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Boeing announced two major deals with huge implications for the Indian economy and airline sector.  The company will invest over $175 million in repair and training facilities, and will source almost $2 billion worth of products and services from India.  In addition to this huge deal, the company also announced that it had closed a deal with the state run Air India for delivery of up to 68 planes over the coming years, valued at $6.9 billion. Link.

In India, 2005 was clearly the year of the domestic air traveler.  It looks like 2006 will become the year of the international traveler from India.  With the introduction of international routes by Jet Airways (and others), Air-India finally was forced to upgrade its over-worked, aging fleet.  This is great news for everyone, even Jet.

There is a lot of buzz surrounding the Indian airline market.  Beside for this hefty order, rumors have been flying about an impending merger between India’s two largest private carriers Jet Airways and Air Sahara.  Jet already controls more than half of the domestic air market, and this merger would solidify Jet’s place as the primary competitor for the state run airlines, domestic and international.  The state run domestic carrier Indian Airlines has announced a facelift of sorts, shifting its look to a updated logo and name to just “Indian”.  In recent years, I-A’s share of domestic traffic has shrunk to below 30%.