Biggest ever order from a domestic carrier, SpiceJet firms up orders for 205 planes from Boeing

Plane orders are for 155 Boeing 737-8 Max and 50 purchase rights for wide body long haul planes like Boeing 787 Dreamliners and the narrow-bodied Boeing 737s.

Published: 13th January 2017 03:21 PM  |   Last Updated: 13th January 2017 04:50 PM   |  A+A-

SpiceJet airlines (File photo | PTI)

Express News Service

NEW DELHI:  In one of the biggest aircraft order by an Indian carrier, India’s fourth largest carrier SpiceJet on Friday announced that it will buy up to 205 Boeing planes worth $22 billion (Rs 1.5 lakh crore).

SpiceJet chairman Ajay Singh, who has to his credit bringing back the carrier that was on the verge of closure in December 2014, said it has firmed up plane orders for 155 Boeing 737-8 Max and 50 purchase rights for wide body long haul planes like Boeing 787 Dreamliners and the narrow-bodied Boeing 737s.

"This is one of the largest deals in Indian aviation and the largest for SpiceJet," Ajay Singh told reporters.

"Our turnaround story has been one which has very few parallels in the world today. We have achieved seven consecutive quarters of profit, highest on-time performance (OTP) and lowest cancellations and a record load factor of over 90% every month for 20 months in a row," Singh explained.

India’s aviation sector is witnessing over 20 per cent growth since past four years and has become one of the fastest growing market globally attracting the attention of stakeholders globally, mainly the plane makers, for whom India now is a crucial market.

For U.S plane maker, Boeing, the SpiceJet agreement will offer it some cushioning in India’s aviation market as its rival Airbus has won record-sized orders with India’s biggest domestic carrier, IndiGo, and another low-cost carrier, GoAir.

While Airbus dominates the domestic short-haul market, which uses narrow-bodied planes, Boeing has dominated the long-haul market in India with wide-bodied passenger aircraft. Airbus commands a two-third market share of aircraft in India.

There are 460 narrow- and wide-bodied passenger planes with Indian carriers, and 194 more have been ordered since 2014 excluding the latest orders from SpiceJet.

Indian carriers have largely remained with either Airbus or Boeing for narrow- and wide-bodied aircraft, with state-owned Air India as an only exception to have aircraft manufactured by both manufacturers.

Airlines benefit by having a fleet of single manufacturer as they have to engage fewer pilots and engineers. Boeing, Airbus or any other aircraft require a different team, which increases an airline’s operational costs.

Some of the newer Indian airlines—such as IndiGo—have chosen to buy a single type from a single manufacturer. IndiGo, with a fleet size of 125 aircraft, has all narrow-bodied Airbus, while Jet Airways has largely Boeing, with a few Airbus as well.

SpiceJet has a fleet size of 40 aircraft, of which 22 are narrow-bodied Boeing 737-800 and of Bombardiers and turboprops, besides 40 Boeing 737-MAX on order.

GoAir has only Airbus planes. In 2015, IndiGo ordered 250 Airbus A320neo planes, Jet Airways ordered 75 Boeing 737 Max planes and Vistara ordered seven Airbus 320neo planes.

In 2014, SpiceJet ordered 40 Boeing 737 MAX planes and Air Costa ordered 50 Embraer E-2 jets. In July 2016, GoAir ordered 72 Airbus A320neo. IndiGo, Jet Airways, Air India, Air Asia and other airlines also have deliveries lined up for orders placed between 2011 and 2013, which are adding to their fleet in phases and will be delivered by 2020.

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