SpiceJet in talks with Boeing, Airbus

Plans to place orders for about 100 narrow-body jets; to fund the deal with fresh equity or debt

Hyderabad/New Delhi: After turning around in the first quarter, the low-cost carrier SpiceJet is looking for expansion. Recently, the airline has initiated talks with Boeing Co and Airbus group opting to acquire about 100 new narrow-body jets, according to its CFO Kiran Koteshwar, adding that the deal would be worth about $11 billion at latest prices.

"We have to place an order so we have a long-term business plan in place. The focus is now on sizeable growth," Koteshwar told Reuters. He further said, by the end of this financial year the company looks forward to raise fresh equity or debt to pay for the planes after it had decided how many to buy, the news agency added.

The airline has plans to buy more Airbus A320neo and Boeing 737 Max aircraft, since the company is working on rebuilding its business after near collapse last year. Releasing the first quarter results, SpiceJet Chairman, Ajay Singh said he is more confident that the best is still to come.

"We will continue to focus on growth and on getting the operational reliability and on-time performance back to world class standards." The no-frills carrier had report huges losses last year and in the verge of closing the show, when it was taken over by the new chairman Ajay Singh in January last and from them onwards the airline was put on expansion mode.

Koteshwar said that the future order would be on sale and leaseback model and that a big order would help it to keep future costs lower. "This will give us economies of scale and for our vendors and suppliers to see that we are growing," he added. Koteshwar claims that the company's cash flow was improved and it is in a position to discharge the obligations on time. "We are emphatically no longer under financial stress.

During this quarter, we have re-inducted an aircraft that had previously been returned and are in discussions to re-induct few more.” SpiceJet had reported Rs 71.85 crore net profit on Tuesday for the three months ending in June, against a Rs 124 crore loss last year, after falling oil prices and a cost-cutting drive outweighed a slump in revenues.