Boeing ups India aircraft order forecast by 10 percent

MUMBAI (Reuters) - Boeing Co (BA.N) sees an uptick in demand for aircraft in India, despite a current downturn in the domestic aviation market on account of high fuel prices and overcapacity, a senior company official said on Wednesday.

Boeing, which has sold civilian aircraft worth $25 billion to India in the past three years, expects rapid economic growth, rising incomes and greater liberalization will help boost demand to 1,001 aircraft worth $105 billion until 2027.

That is nearly 10 percent higher from its 2007 forecast.

"Despite the temporary downturn, over the long-term we are very bullish, as the market fundamentals remain strong," Dinesh Keskar, senior vice president for sales, commercial airplanes, said at a news conference.

"We're not seeing deferrals or cancellations. Which is why, contrary to expectations, we've upped our forecast."

It is expected that losses in the domestic aviation industry could more than double to up to $1.5 billion in 2008/09 as high prices of jet fuel, which makes up about 40 percent of an airline's running cost, have forced up fares and dented demand.

"It is a do-or-die environment," Keskar said.

"The next few months will be tricky, but a focus on reducing losses has already started, and we think the domestic market will find equilibrium over the next 12 months," Keskar said.

Consolidation, ongoing capacity reduction and a recent infusion of capital in discount carrier SpiceJet (SPJT.BO), a Boeing customer, are signs the market is improving, he said.