SpiceJet Orders B737 Max Planes

Wednesday, 12th March 2014 at 10:41am

SpiceJet, India-based budget airline, has recently inked a deal with Boeing for firm orders of 42 B737 Max planes worth $4.4 billion. The B737 Max airliner is the 4th generation of the B737 family of aircraft which is thought to be more fuel efficient than its older versions.

In a bid to catapult itself into one of India's leading low-cost carriers, SpiceJet has signed a deal with Seattle-based aircraft manufacturer for a staggering orders of 42 B737 Max aircraft valued at $4.4 billion. Each aircraft has a list price of $103 million.

The B737 Max aircraft is the latest in the B737 family and is currently being developed by Boeing Company to replace the B737 Next Generation family, which it is based on for much of its design.

The firm orders of 42 aircraft will significantly increase the budget airline's fleet to support its route expansion program. It currently has 57 planes it its fleet servicing more than 350 flights daily to key destinations in India and overseas.

SpiceJet keeps an exclusive fleet of B737 family of aircraft with the exception of 15 turboprops.

The airline is expected to take delivery of its first B737 Max jet in 2018. The newest generation of the B737 family is thought to be 14% more fuel efficient over its predecessor, the B737 Next Generation, though retains much of the original fuselage design feature of NG.

It is even contemplating of replacing 13 of its current orders of B737 NG with the B737 Max. With the recent firm orders for 42 B737 Max jets, SpiceJet's total orders from Boeing company now stands at 52 planes valued at $8.6 billion.

Like most Indian airlines, SpiceJet has been operating in the red since 2007 and is expected to pile up more losses this year to the tune of 11.86 billion rupees ($194 million). The increasing loss is attributed mainly to the skyrocketing fuel costs as well as weak local currency plus the fact that the airline is following a low-cost business model that allows it to sell heavily-discounted tickets.

The airline is hopeful, though, that the fuel-efficient B737 Max jets that it orders will temper its fuel expenditures each year as soon as they join the fleet in 2018.

By: Pete Lee.