SpiceJet Might Crack a Deal of $11 Bn with Boeing and Airbus


BANGALORE: One of the most popular airlines in India, SpiceJet is planning to crack a deal of acquiring 100 new narrow body jets worth about $11 billion with Boeing Co and Airbus Group. The news came across as Chief Financial Officer revealed that the company is in talks with Boeing Co and Airbus Group, reports ET.

SpiceJet is planning for a revival from last year’s losses by acquiring more Airbus A320neos and Boeing 737 Max aircraft, said Kiran Koteshwar.

The company looks forward to placing the order for the jets by the end of the current fiscal year and will search to raise fresh equity or debt as soon as the firm decides on the number of jets to be bought.

"We have to place an order so we have a long-term business plan in place. The focus is now on sizeable growth," he added.

SpiceJet needs immediate expansion owing to losses the company is going through. The market size of the airline service has shrunk to 12 percent compared to the last year’s 20 percent.

India is emerging as the world’s fastest growing markets for air travel considering which the airline firms are bucking up and are planning aggressive expansion of fleets. In this rat race, in order to dominate the market companies attract the passengers by offering tickets at lower price thereby running into losses.

The biggest competitor of the market, Indigo attracts the maximum passengers with its sale and leaseback model.

"SpiceJet has always been constrained by the lack of long-term orders. This will give us economies of scale and for our vendors and suppliers to see that we are growing," said Koteshwar.

SpiceJet has achieved a meager net profit of 718.5 million in the last three months compared to big of loss 1.24 billion rupee that incurred last year.

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