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SpiceJet inks $22-bn deal for 205 planes
In one of the biggest deals in the Indian aviation sector, SpiceJet will purchase up to 205 new aircraft from Boeing with the order valued at Rs 150,000 crore.
New Delhi : In one of the biggest deals in the Indian aviation sector, SpiceJet will purchase up to 205 new aircraft from Boeing with the order valued at Rs 150,000 crore. With the earlier order for 55 planes and additional 100 new 737-8 MAX aircraft, the no-frills carrier now has firmed up order for a total of 155 planes, besides the purchase rights for 50 B737-8 MAX and wide-body aircraft.
Announcing the deal here on Friday, SpiceJet Chairman and Managing Director Ajay Singh said the total order of 205 aircraft was valued at Rs 1,50,000 crore ($22 billion). “This is one of the largest deals in the Indian aviation and the largest for SpiceJet,” Singh said. Currently, the budget carrier has 32 next-generation B737s and 17 Bombardier Q400s.
“We are honoured to build upon more than a decade of partnership with SpiceJet with their commitment of up to 205 airplanes,” said Boeing Company Vice-Chairman Ray Conner. According to Singh, SpiceJet would explore different options for financing the deal.
Singh said the induction of the new aircraft, which burn 20 per cent less fuel, would help SpiceJet reduce costs and enhance its ability to compete. “This is a composite transaction for purchase of up to 205 aircraft valued at $22 billion,” Singh said, adding that the focus was on growing the airline in a responsible and profitable manner.
After being on the verge of going belly up two years ago, the airline has been in the black for the past seven straight quarters. When asked about financing of the deal and its impact on the debt-to-equity ratio, Singh said there would be no “equity dilution” and the balance sheet would be healthy. In the 2016 July-September quarter, the airline had posted its highest-ever quarterly profit of Rs 59 crore. In the year-ago period, the same stood at Rs 29 crore.
