SpiceJet Orders More Planes From Boeing

Thursday, 23rd January 2014 at 08:37am

Already the biggest operator of Boeing planes, India's second largest low-cost carrier, SpiceJet, has placed an order of 40 more Boeing planes which is worth over $4 billion.

The budget airline has agreed to purchase from the Washington-based aircraft manufacturer 40 B737 planes to augment its fleet of 56, 42 of which are also B737.

The airline also made a firm order for 42 of the B737 MAX variant from Renton-based Boeing Commercial Airplanes, a division of Boeing Company which exclusively manufactures the B737 family.

It has further opted to order another 42 jets of the new generation family depending on the growth of its business.

However, according to Boeing, an unnamed airline placed an order of 164 medium-haul aircraft at the end of 2013 without disclosing any details.

The budget carrier is the country's fourth biggest airline in terms of market share. The new aircraft orders it recently made this month is probably to send a message to prospective investors that the airline is aggressive in its expansion program.

It is currently seeking fresh capital, probably from foreign investors, to help recoup its losses due to weak rupee and skyrocketing fuel costs.

The refleeting program is seen as a good strategy to attract potential investors and may bail the airline out of a dreaded collapse. Industry analysts suggested that the airline is more attractive to foreign investors than any of the Indian airlines after Jet Airways struck partnership with Etihad Airways early last year.

True enough, the airline disclosed earlier that it has already talked to potential investors but refused to divulged any details including the names.

Etihad Airways' rivals in the Gulf region, Qatar Airways and Emirates, were rumored to be the two airlines who showed interest in investing in SpiceJet.

The rumors began to fade after SpiceJet surprised the public when it signed an inter-line partnership with Singapore's Tigerair. The partnership between the two budget airlines is seen to be a prelude to a much closer relationship in the future.

Its recent firm orders for 40 planes from Boeing will hopefully enable the carrier to ink a partnership deal with prospective investors soon and stem its losses.

SpiceJet's order of 40 planes with Boeing counters the recent orders by Tata-SIA airline of 20 jets with Airbus. The two aircraft makers compete to get a bigger share of India's fast-growing aircraft market.

As of late, Airbus edges over Boeing in India in terms of fleet size used by local airlines.

By: Pete Lee.