SpiceJet inks order for 737 Max planes with Boeing
New Delhi: Budget airline SpiceJet on Friday announced that it has ordered 100 Boeing 737 Max planes with an option to increase another 50 more it expand its footprint over the coming decade and cut costs. Earlier, the low-cost carrier had placed an order for 55 aircraft, which are yet to delivered.
SpiceJet chairman Ajay Singh on Firday said the planes will be delivered from 2018 to 2024.
SpiceJet’s existing fleet of 48 is dominated by Boeing aircraft, with 31 737NG planes. The rest are Bombardier Q-400 turboprop planes that fly regional routes. Typically low-cost airlines tend to order planes from the same manufacturer because this reduces operating, engineering, and maintenance costs.
The Ajay Singh-controlled airline has a 12.8% share of the domestic market.
The airline already has a pending order for 55 Boeing 737 Max aircraft, placed in 2014. These are scheduled to be delivered starting 2018.
These 55 aircraft along with the new order of 75-125 more will place SpiceJet in the league of airlines that have ordered over 100 planes.
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InterGlobe Aviation Ltd-run IndiGo, which controls 42% of the domestic market with 125 planes, has placed orders for about 400 aircraft and GoAir, with 8% of the domestic market and 23 planes, recently increased its order book to a total of 144 planes.
Both have ordered Airbus A320Neo aircraft.
The Boeing 737 Max is an updated version of the company’s best-selling single-aisle jet and the fourth big change in the 50-year history of the 737, the best-selling jetliner of all time.
SpiceJet will have the option to buy the stretch version of the Max in its latest order, said the person cited above. The Max Stretch can accommodate 200 passengers compared with the regular version’s 189 seats—useful in slot-constrained airports such as Mumbai.
To be sure, SpiceJet will only pay a small fraction of the total cost to book the order and seal its spot in the delivery schedule of the Seattle-based manufacturer. The remainder will be paid closer to the delivery date of the aircraft.
Bulk orders are normally heavily discounted, with manufacturers throwing in various sops such as simulator training to retain customers.
Indian carriers could place orders for 250-300 aircraft in the next 3-6 months, aviation consulting firm CAPA said in its December outlook.
“IndiGo will take delivery of more than two aircraft a month through to March 2018, which will see its fleet size reach 160 by then (of which around 140-145 aircraft will operate on domestic routes),” CAPA said in its note.
“This pace of growth will create a strategic compulsion for other Indian carriers to accelerate their expansion to remain relevant.”