In one of the biggest deals in the Indian aviation sector, SpiceJet will purchase up to 205 new aircraft from Boeing with the order valued at Rs 1,50,000 crore.
In one of the biggest aircraft orders placed by an Indian carrier, Spicejet, the Gurgaon based low cost carrier ordered a total of 205 planes from Boeing. The order size is worth Rs 1.5 lakh crore. Currently, SpiceJet has a fleet size of 47 aircraft. The shares of SpiceJet went up by three per cent intraday as the news of airline’s fleet expansion plans became official.
Ajay Singh, chairman, SpiceJet, who brought the airline back from the verge of closure two years back, said the order is a firm one for 155 Boeing 737-8 Max and 50 purchase rights for wide body long haul planes like Dreamliner and the B-737s.
"This order is the biggest in the SpiceJet's history. It ends the era of turnaround and marks the beginning of a growth story for the next decade," the company said in an official statement. It added that India is the world’s fastest growing aviation market where the air travellers are growing at the rate of over 20 per cent each year due to competitive ticket prices and increasing disposable income.
"Our turnaround story has been one which has very few parallels in the world today and we are proud of it. SpiceJet has achieved seven consecutive quarters of profit, highest on time performance and lowest cancellation and a record load factor of over 90 per cent every month for 20 months in a row," said Singh.
On its part Ray Conner, vice chairman, The Boeing Company said: "The economics of the 737 max will allow SpiceJet to profitability, open new markets, expand connectivity within India and beyond and offer a superior passenger experience."
The company said that the new planes will deliver 20 per cent lower fuel use than the first next-generation B737s and the lowest operating cost in its class - 8 per cent per seat less than its nearest competitor.
The agreement with SpiceJet is a much-needed boost for Boeing in India, as its rival Airbus has won record-sized orders with InterGlobe Aviation's IndiGo, India's biggest budget airline, as well as a recent deal with GoAir.
The budget carrier has seen a turnaround in its business ever since Singh came back to spearhead the recovery in 2015. The company’s shareholders in December 2016 approved an annual remuneration of Rs 15 crore to Singh after the airline posted profits for seven straight quarters. He had reportedly declined to take a salary till the airline had turned profitable.
BW Reporters
Ashish Sinha is an experienced business journalist who has covered FMCG, auto, infrastructure, tourism, telecom among several other beats. Ashish has keen interest in the regulatory scenario impacting different sectors. He writes on aviation, railways, post and telegraph, infrastructure, defence, media & entertainment, among a wide variety of other subjects.
