SpiceJet inks Rs 1.5-L cr deal with Boeing

SpiceJet inks Rs 1.5-L cr deal with Boeing

SpiceJet inks Rs 1.5-L cr deal with Boeing

 No-frills carrier SpiceJet on Friday announced one of the biggest aircraft order in the country buying 205 aircraft from Boeing for around $22 billion or around Rs 1.5 lakh crore.

 The airline said the order is confirmed for 155 Boeing 737-8 MAX, of which 55 were ordered earlier, and purchase rights for 50 737-8 MAX and wide-body long haul planes that could possibly be used by the airline to launch low-cost international services.

The first aircraft of this order will be delivered in the third quarter of 2018 and all aircraft are to be in by 2024. At present, SpiceJet has 32 B-737s and 17 Bombardier Q400s in its fleet.

The Indian aviation market is booming with aircraft orders as only on Wednesday, another low-cot airline GoAir announced that it is buying 72 A320neo from Airbus for around $7.7 billion. In November 2015, Jet had announced the order for 75 737 MAX single aisle aircraft from Boeing for $8,250 million while IndiGo in August same year firmed up a $25.7 billion order for 250 A320neo aircraft.

While the order shows the growth trajectory of SpiceJet, which was on the verge of closing down in December 2014 following deep financial troubles, it also gives Boeing a boost in India where rival aircraft manufacturer Airbus has a foothold.

A buoyant SpiceJet Chairman and Managing Director Ajay Singh said the airline’s turnaround story has been one which has “very few parallels” and that they are “very thrilled” on this “incredible day”.

“We are now in a very good position to expand our network and operations which includes both domestic and international routes and destinations,” Singh said.

Boeing Vice Chairman Ray Conner said it was a “tremendous day” and that the “economics of the 737 MAXs will allow SpiceJet to profitably open new markets, expand connectivity within India and beyond.”

Singh believes that the induction of the new aircraft, which burn 20% less fuel, would help SpiceJet reduce costs and enhance its ability to compete.

The order

Firm orders for 155 B737-8 MAX planes
Purchase Rights for 50 B737-8 MAX and wide-body aircraft
Deal of Rs 1.5 lakh crore or $22 billion at list prices
Deal inked on December 31, 2016