India must fly with China's Boeing bar

China's restrictions on inducting Boeing aircraft presents an opportunity to Indian airlines that have placed large orders with the US maker of commercial jets. Indian airlines can move ahead in the queue for deliveries. This should speed up India's pace of acquiring a young civil aviation fleet, which ought to raise the competitiveness of the country's airlines. Fuel-efficient aircraft fatten airline profits while shrinking their carbon footprint. These factors matter in price-sensitive domestic aviation and value-conscious international travel. Faster aircraft deliveries have second-order effects on the development of India's aviation ecosystem, for instance, aircraft maintenance, which pulls down airline operating costs. Crucially, having enough seats on international routes avoids having to hand them over to foreign carriers, a considerable opportunity cost for Indian airlines as they expand their fleets.

The size of India's untapped domestic aviation market offers some protection from a global economic slowdown brought on by trade fragmentation. Projected weakness in jet fuel prices over the medium term is another tailwind. The international aviation industry, on its part, may have to rework supply chains, leading to slower aircraft production. There may be further opportunities in vendor development for Indian aviation, given the size of its airlines' orders with Boeing and Airbus. India is negotiating trade agreements with the US and the EU, where aerospace constitutes a leading export industry.

The market dynamics and aeronautical infrastructure build-up make India a growth engine for the global aviation industry for the next couple of decades. The next wave of international travel will be led by Indians. The country needs to move its international aviation hubs onshore. Aircraft acquisition is the first step towards that goal. Indian airlines have made a quick start by placing their orders for jets before global aviation recovered from the pandemic. The tariff wars provide them with an opportunity to build momentum to take on the location, fuel cost and aviation infrastructure advantages of competitors in West Asia and Southeast Asia.