Tuesday, January 10, 2017

India's SpiceJet set to order B737s for fleet expansion plan

SpiceJet(SG, Delhi Int'l) has chosen Boeing (BOE, Chicago O'Hare) for its fleet renewal needs airline sources have told Bloomberg news. The Indian LCC had previously indicated it was weighing up the A320neo from Airbus Industrie (AIB, Toulouse Blagnac) and the B737 MAX from Boe
ing for its future growth and expansion needs.

Speaking on condition of anonymity, the sources said the Indian LCC would order "at least" ninety-two (92) B737s with a deal set to be closed within the next few weeks.

At present, SpiceJet operates an in-house fleet of forty-five aircraft including two B737-700s, twenty-two B737-800s, four B737-900(ER)s, and seventeen Dash 8-400s all of which are leased from third-party firms.

In its latest 2015/16 financial report, SpiceJet management said it expected India's domestic market to continue growing at its current rate of 20% through to year-end following which it will stabilise around 10-12%.

"With demonstrated profitability and growth potential, [an] increase in capacity is imperative to stay in line with demand growth to command a healthy market presence. The Company is close to placing a substantial fleet order to secure the long-term capacity requirements to address the robust demand," it said.

Despite the financial demands the new order will place on the airline, chairman Ajay Singh has come out against New Delhi's recent decision to amend caps on foreign ownership of local carriers.

As part of its drive to encourage greater investment in India's burgeoning aviation sector, Narendra Modi's government increased the cap on Foreign Direct Investment (FDI) in local airlines from the previous 49% to 100% albeit with certain restrictions applied and with government approval.
10/01/17 Spicejet