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 1,50,000 crore.
With an earlier order for 55 planes and additional 100 new 737-8 MAX aircraft, the no-frills carrier has now firmed up the order for a total of 155 planes, besides purchasing rights for 50 B737-8 MAX and wide body aircraft.
Announcing the deal on Friday, SpiceJet chairman and managing director, Ajay Singh, said the total order of 205 aircraft is valued at Rs 1,50,000 crore ($22 billion).
“This is one of the largest deals in Indian aviation sector and the largest for SpiceJet,” Singh said, while adding that the focus is on expanding the airline in a responsible and profitable manner.
Currently, the budget carrier has 32 next generation B737s and 17 Bombardier Q400s.
‘New Aircraft Would Reduce Costs and Enhance Ability to Compete’
“We are honoured to build upon more than a decade of partnership with SpiceJet and their commitment of up to 205 airplanes,” Boeing Company vice chairman Ray Conner said.
According to Singh, SpiceJet would explore different options for financing the deal.
Singh said that the induction of the new aircraft, which burns 20 percent less fuel, would help SpiceJet reduce costs and enhance its ability to compete.
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 debt to equity ratio, Singh said there would be no “equity dilution” and the balance sheet would be healthy.
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