Boeing (BA) recently delivered its first 787 Dreamliner to Air India after a delay of nearly four years. The state-owned airline had ordered 27 Dreamliners in 2006 as mainstays of its international operations, but the delay, which resulted in a public spat between the parties, was finally settled. The airline is scheduled to receive five more planes by December and the rest in four years through 2016.

At a broader level, India is very important to Boeing, as it is expected to become one of the largest commercial aviation markets in the world in the coming decades. It thus holds a great deal of growth potential for Boeing and its major European rival, Airbus.

Currently, Boeing and Airbus hold nearly equal market share in the Indian commercial aviation market. But Airbus leads Boeing by more than three times in terms of number of new orders for commercial airplanes from India.

We currently have a stock price estimate of $75 for Boeing, approximately 5% above its current market price.

Commercial aviation market of India

India is forecast to be the second-largest market within the Asia-Pacific region, after China, requiring 1,450 new planes worth $175 billion over the next two decades. Boeing anticipates air traffic in the country to grow at 8.4% per year over the same period, one of the fastest in the world.

At present, passenger traffic is growing at 7.2% in India, above the average growth rate of 5.9% in the Asia-Pacific and the global average of 4.8%. Sustained economic growth has led to expansion in its domestic businesses and a rising middle class with disposable incomes, and that is fueling the demand for air travel.

Boeing vs. Airbus in the Indian aviation market

Of the five largest airlines of India -- Air India, IndiGo, Jet Airways, SpiceJet and GoAir -- four are domestic private carriers. Air India is the only state-owned carrier. The combined fleet composition of these airlines is equally balanced between Boeing and Airbus. However, in terms of new airplane orders, Airbus has 303 from the five airlines, while Boeing lags behind at 86.

With the delivery of its first Dreamliner to Air India, Boeing needs to increase its focus on the commercial aviation industry of India so as to gain a greater share of new orders from its airlines -- and thus be able to maintain its current market share in the Indian commercial aviation industry.