In terms of the aircraft-on-order to aircraft-in-service ratio, India is ranked number one, says a report by Sydney-based aviation think-tank Centre for Asia Pacific Aviation (CAPA). The country is also the third largest aviation market in terms of domestic passenger traffic (over 100 million passengers) behind USA and China, which are seven and four times, respectively, the size of the Indian market.
As more people take to the sky, domestic airlines have no choice but to order more aircraft to meet the growing demand. But large orders for aircraft are no longer a novelty. After all IndiGo, India’s largest airline by passenger numbers, is one of the biggest customers of the Airbus A320 family, with an order size of 530 aircraft in total. These include 430 A320Neo from orders placed in 2015 (250 A320Neo) and 2011 (180 A320Neo). In 2005, Indigo placed orders for 100 A320, which have all been delivered. Meanwhile, Jet Airways is expected to place an order for 100 narrow body aircraft, while Vistara is likely to go with 50 narrow bodies and 50 wide, says CAPA’s research.
Late last year, Mumbai-based GoAir firmed up an order for acquiring another 72 Airbus A320Neo at a list price of around $8 billion. The airline is said to have received a hefty discount due to the large scale of the order. In a recent statement, Airbus said the agreement was reached on 30 December last year and that it doubles GoAir’s order bookings for the aircraft type to 144. The first of the 72 aircraft will be delivered in 2020, it said.
But for low-cost carrier (LCC) SpiceJet an order size of 205 Boeing airplanes (valued at around $22 billion) followed by an additional order for 20 737 MAX 10 planes (worth $4.7 billion) and 20 conversions from the previous order placed in June 2017, is indeed a head turner. Why? In late 2014, just about 27-months before it placed one of the largest orders with Boeing, SpiceJet was crippled with a shortage of cash. It could not pay off its debt and dues and was virtually shutting down. In fact, in December 2014, SpiceJet was grounded after oil companies refused to refuel its aircraft due to non-payments. The airline posted consecutive losses. For 2011-12, it posted a loss of Rs 604 crore. The next fiscal, losses stood at Rs 192 crore, and in 2013-14, losses zoomed to over Rs 1,000 crore. Next year, it posted a loss of Rs 747 crore. But in early 2015, when the management changed hands and its original promoter Ajay Singh tookover, SpiceJet reported a fantastic turnaround by posting Rs 450 crore profit for 2015-16. Last fiscal too, it reported profits at Rs 431 crore. SpiceJet is in fact doing so well, in January 2017, Singh announced the biggest order of 205 Boeing aircraft, an order worth over Rs 1.5 lakh crore. That is not all. Recently, the airline placed an order to buy up to 50 Q400 turboprop planes with Bombardier to consolidate its footprint in the regional markets. What a turnaround!
10/10/17 Business World
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As more people take to the sky, domestic airlines have no choice but to order more aircraft to meet the growing demand. But large orders for aircraft are no longer a novelty. After all IndiGo, India’s largest airline by passenger numbers, is one of the biggest customers of the Airbus A320 family, with an order size of 530 aircraft in total. These include 430 A320Neo from orders placed in 2015 (250 A320Neo) and 2011 (180 A320Neo). In 2005, Indigo placed orders for 100 A320, which have all been delivered. Meanwhile, Jet Airways is expected to place an order for 100 narrow body aircraft, while Vistara is likely to go with 50 narrow bodies and 50 wide, says CAPA’s research.
Late last year, Mumbai-based GoAir firmed up an order for acquiring another 72 Airbus A320Neo at a list price of around $8 billion. The airline is said to have received a hefty discount due to the large scale of the order. In a recent statement, Airbus said the agreement was reached on 30 December last year and that it doubles GoAir’s order bookings for the aircraft type to 144. The first of the 72 aircraft will be delivered in 2020, it said.
But for low-cost carrier (LCC) SpiceJet an order size of 205 Boeing airplanes (valued at around $22 billion) followed by an additional order for 20 737 MAX 10 planes (worth $4.7 billion) and 20 conversions from the previous order placed in June 2017, is indeed a head turner. Why? In late 2014, just about 27-months before it placed one of the largest orders with Boeing, SpiceJet was crippled with a shortage of cash. It could not pay off its debt and dues and was virtually shutting down. In fact, in December 2014, SpiceJet was grounded after oil companies refused to refuel its aircraft due to non-payments. The airline posted consecutive losses. For 2011-12, it posted a loss of Rs 604 crore. The next fiscal, losses stood at Rs 192 crore, and in 2013-14, losses zoomed to over Rs 1,000 crore. Next year, it posted a loss of Rs 747 crore. But in early 2015, when the management changed hands and its original promoter Ajay Singh tookover, SpiceJet reported a fantastic turnaround by posting Rs 450 crore profit for 2015-16. Last fiscal too, it reported profits at Rs 431 crore. SpiceJet is in fact doing so well, in January 2017, Singh announced the biggest order of 205 Boeing aircraft, an order worth over Rs 1.5 lakh crore. That is not all. Recently, the airline placed an order to buy up to 50 Q400 turboprop planes with Bombardier to consolidate its footprint in the regional markets. What a turnaround!
10/10/17 Business World
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