SpiceJet Ltd is in talks with Boeing Co and Airbus Group SE to buy more than 100 single-aisle aircraft worth about US$11 billion at list prices, in what would be the Indian budget carrier’s largest-ever plane order.
The talks are for Airbus A320neo and Boeing 737 Max aircraft, SpiceJet chairman Ajay Singh said in an interview on Tuesday at Gurgaon, near New Delhi. A deal could be signed during the current financial year, which ends on March 31.
Carriers in India and China have ordered hundreds of new aircraft in the past decade as an economic boom encourages people in the world’s two most populous nations to travel more. India needs 1,600 new aircraft valued at US$205 billion in the next two decades, Boeing forecast last year.
SpiceJet shares rose 5.6 percent yesterday to 28.10 rupees (US$0.44), their highest intraday surge in two years.
SpiceJet currently flies 18 Boeing 737s and has two Airbus aircraft on wet-lease, but a purchase from Airbus would be its first from the French planemaker. IndiGo, the country’s biggest carrier, and the Indian units of Singapore Airlines Ltd and AirAsia Bhd only fly Airbus aircraft.
“We will bring in some investments at the time of the order,” Singh said.
“The order will depend on what volume level we get at what price,” he said, adding that it would be for more than 100 planes.
Any new investment in SpiceJet would probably take the form of new shares or debt, the company’s chief financial officer Kiran Koteshwar said in a separate interview on Tuesday.
Talks do not mean a deal will ultimately be concluded. IndiGo signed an initial agreement with Airbus in October last year for 250 A320neo planes, in what would have been Airbus’ largest order by number of aircraft. However, the terms expired before a final deal was signed. The companies remain in talks, according to IndiGo.
SpiceJet, which ran into financial trouble last year and was on the verge of shutting down, was rescued by Singh. Since then, the carrier has posted two consecutive quarters of profit.
The airline on Tuesday said it posted 718.5 million rupees (US$11.25 million) in net income in the quarter through last month, compared to a 1.24 billion rupee loss in the same period last year.
In March last year, the carrier ordered 42 Boeing 737 Max aircraft valued at US$4.4 billion. The Boeing 737 Max is an upgraded version of the single-aisle Boeing 737 — the world’s most widely flown jetliner — and features new more-efficient engines.
The A320neo is also an upgraded version of Airbus’ best- selling plane.
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