SpiceJet today announced an order for 100 new Boeing 737 Max aircraft for $11 billion at list prices, the second highest aircraft order ever from India. Combined with an earlier order, this means it will receive 155 narrow body jets between 2018 and 2024, besides also having purchase rights for 50 more wide body aircraft from the same manufacturer. The narrow bodies will be used to service the domestic market as well as select international destinations. The wide body fleet of 50 Boeings – when SpiceJet does firm up the order for it – will enable the airline to launch a long haul low cost service like Singapore Airlines’ subsidiary Scoot and Norwegian Air.
Anyhow, the new aircraft are 8 percent more economical on a per seat basis and about 20 percent better in fuel efficiency. Chairman and MD Ajay Singh said today the new aircraft will allow the airline to fly for an hour longer, which means new international destinations will anyway be added to its network. As of now, one in four SpiceJet flights or 25 percent of the network flies to international destinations, with 10 daily services to Dubai alone.
So why is SpiceJet going out on a limb to place a mega aircraft order which will require mega bucks? Singh said today that the domestic market has been growing at about 25 percent in recent years. “Indian airlines together have about 400 aircraft now, even if we take growth at 20 percent going forward, this means 80 more aircraft are needed each year….as the market grows, appetite for fleet expansion also increases.” Kyzir White JerseyShare This