SpiceJet, now well out of red, to order 90-100 aircraft
13 Jan 2017
Low-cost carrier SpiceJet, which couple of years back was on verge of grounding its operations due to financial problems, plans to order 90-100 airplanes, including at least 50 new Boeing 737 Max.
The order possibly includes a renegotiated order for 42 Boeing 737 Max planes it made in 2014. At the current listed price, the deal is expected to be worth over Rs55,000 crore.
The airline is also likely to induct wide-bodied Boeing 787 on lease for operation on its international routes.
At present, SpiceJet has 47 aircraft comprising 29 Boeing 737s and 18 Bombardier Q400s. A SpiceJet spokesperson refused to comment on the development. The deal is expected to be announced in Delhi today by the airline's promoter Ajay Singh.
"Negotiations are going on for quite some time. We expect to complete these negotiations and place the order this financial year," the spokesperson had said earlier.
Boeing 737 Max are state-of-art fuel efficient planes produced by the US-based aircraft manufacturer and compares with Airbus's A320 Neo planes.
The Wadia Group-promoted GoAir on Wednesday confirmed an order for 72 A320 Neo planes, estimated to be worth over Rs52,000 crore. This is in addition to the 72 A320 Neo ordered earlier, which takes the tally to 144. The airline inducted the first A320 Neo in June last year. It is expected to start its international operations this year.
Similarly, market leader IndiGo, owned by InterGlobe Aviation, has ordered 430 A320 Neo.
Experts said it will be interesting to see how SpiceJet, if it inducts B787 Dreamliner, will use the aircraft as at present national carrier Air India uses it for long distance flying, including Europe, Australia among others. Air India, a full-service carrier unlike SpiceJet, also uses the Dreamliner on some of its high-density routes like Mumbai-Delhi.
The development seems significant as only till around in 2014 that the airline was struggling to run its day-to-day operations as lessors, airport operators and oil companies refused to give further credit, as a result of which scores of flights had to cancelled, leading to chaos. However, since then things visibly improved with the airline making operating profits since last several quarters, on the back of low fuel cost and better performance.
The revival was led by Bharatiya Janata Party Member of Parliament member Ajay Singh, who took the reins of the airline from earlier owner Kalanithi Maran, and did not take a salary till the airline turned profitable. In December, the stakeholders approved the proposal to pay up to Rs15 crore as annual remuneration to Singh.
The airline is also mulling offering ESOPs to some of its employees, to encourage them to stick with the company for a longer time.
