SpiceJet To Replace Its Boeing Fleet with Airbus?

Saturday, 23rd March 2013 at 03:20am

An Indian budget airline, SpiceJet, is weighing options whether to replace its all-Boeing fleet with Airbus planes amid problems haunting Boeing's Dreamliner jets which remain grounded.

According to the airline CEO, Neil Mills, the budget carrier is planning to acquire a fleet of new-generation planes, possibly Airbus aircraft, in its bid to replace its all-Boeing fleet. The low-cost airline is currently operating on an all-Boeing fleet of 37 planes with options to add 7 more of the same type of aircraft this year.

The plan by SpiceJet, if pushed through, would give Airbus planes a dominant market share in India's commercial aviation industry. Already, IndiGo and GoAir have an all-Airbus fleet, for a total of 76 aircraft between them. IndiGo is a budget airlines and dominates the domestic market in India with a market share of more than 27%.

Boeing is already smarting from bad news to bad news after its 787 Dreamliner jets hit a series of problems, causing all newly-delivered 787s to be grounded until now.

By mere coincidence, Mills was also part of the team that decided to replace EasyJet's all-Boeing fleet of 75 aircraft with an all-Airbus fleet in 2002.

The airline executive specifically mentioned that they wanted to replace the Boeing planes with Airbus A320neos. The A320neo is the latest offering from Airbus company under development whose main feature is the use of larger and more fuel-efficient engines.

737 Max

Early this week, SpiceJet's share fell on the wayside by 1.2 percent averaging 33.5 rupees through the day. On average, the stock contracted by 24% for the first two months.

When sought for comments on SpiceJet's plan, Boeing didn't issue any statements regarding the matter.

The US-based company disclosed last month that it has already negotiated with SpiceJet and Jet Airways for orders of single-aisle 737 Max, the latest of the 737 family of aircraft currently under development whose main feature is the use of CFM International LEAP-1B engines.

According to Dinesh Keskar, Boeing's India and Asia-Pacific Senior Vice President, the company has received firm orders of 1,064 737 Max aircraft globally. In contrast, Airbus has received global orders of 1,734 A320neos as of December 31 last year.

In January 2011, IndiGo placed a firm order to Airbus for 150 A320neos and 30 of the regular A320 aircraft. GoAir, on the other hand, placed a firm order to Airbus on June 2011 for 72 A320neos.

Mr. Mills also disclosed that the budget airline is considering to add five more Q400 turboprops to its fleet for short-haul regional routes.

By: Pete Lee.