Boeing plans new logistics centre in India amid major aircraft order

Boeing Co (BA.N) plans to invest about $24 million in India to set up a logistics centre for airplane parts, Salil Gupte, president of the local unit told Reuters on Monday, boosting its footprint in the country amid a large plane order.

India’s former state-run carrier Air India, which is now owned by Tata Group, is expected to announce a major deal this week for nearly 500 jets, worth more than $100 billion at list prices, split between Boeing and Airbus, Reuters has reported.

Boeing’s share includes 220 planes split as 190 737 MAX narrowbody jets, 20 787 widebodies, and 10 777Xs.

While Gupte did not comment on any specific customer orders, he said India was the third-largest domestic aviation market in the world and would soon be number three internationally.

“India is one of the most important civil aviation markets in the world … and that means there’s going to be huge opportunity in both narrowbody and widebody aircraft,” he said.

With the new centre, Boeing aims to speed up access to parts which will improve aircraft availability for airlines and reduce flight cancellations or grounding due to maintenance issues, he said.

The move comes at a time when Boeing is making deeper inroads into India’s single-aisle market, the mainstay of rival Airbus (AIR.PA), and winning orders from start-up airline Akasa Air and rival SpiceJet (SPJT.NS).

Boeing forecasts India’s carriers will need 2,200 new planes over the next 20 years, and with narrowbody planes making up the bulk Gupte expects that to be a focus area for Boeing.
“As the middle-class grows and as India leads the world economic growth, you will see more and more people fly. That means we need to ensure our customers have the narrowbody aircraft they need to serve this market,” he said.