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Jet Airways to buy 75 Boeing 737 MAX planes

BusinessToday.In     April 4, 2018

Things are looking up for the aviation sector in the country and the airlines are gearing up to service the ever-increasing demand. Full-service carrier Jet Airways has entered into an agreement with Chicago-based aircraft manufacturer Boeing to purchase 75 B-737 Max aircraft.

The order book of Indian carriers, which currently stands at over 1,000 aircraft, is set to get bigger with Naresh Goyal-owned airline ordering 75 more Boeing planes. The deal comes at a time when domestic passenger traffic is expected to touch 18 per cent growth in FY18.

Accoding to a report in Reuters, the jets would be worth $8.8 billion at list prices. The airlines, for a last few years, have been placing bulk orders to get discounted rates from aircraft manufacturers. In January last year, low-cost carrier SpiceJet had announced a deal to purchase 205 airplanes from Boeing for a whopping $22 billion or Rs 1.5 lakh crore.

Last month, Jet Airways CEO Vinay Dube had said Jet hopes to order 75 narrow-body aircraft by March 31 in addition to 75 Boeing 737 MAX that the airline had ordered in 2015. The full service carrier has a fleet of around 119 planes, comprising Boeing 777-300 ERs, Airbus A330-200/300, Next Generation Boeing 737s and ATR 72-500/600s.

In terms of pending orders, IndiGo is much ahead of the competition with nearly 400 Airbus A320s, and about 49 ATRs on order. This is followed by SpiceJet, which has firmed up its orders for 155 Boeing 737-8 Max, and 50 Bombardier Q400s. In India, LCCs like IndiGo and SpiceJet follow sale-and-leaseback model which enable them to sell new aircraft to lessors and lease those aircraft back.

In October 2014, IndiGo had placed a mega-order with Airbus to purchase 250 single-aisle A320neos. That deal continues to be the single-largest order placed by any airline in terms of number of aircraft. In 2011, IndiGo had placed orders for 180 planes with Airbus which was the biggest order in commercial aviation history at that time.

India is set to become the third-largest aviation market by 2019/20, behind the US and China. There are over 500 aircraft flown by scheduled commercial airlines at the moment.
Airbus has estimated that India will need some 1,750 new passenger and cargo aircraft over the next 20 years to meet the exponential growth in passenger and freight traffic. It includes 1,320 new single-aisle aircraft and 430 wide-body aircraft valued at $255 billion.

Airbus says the air traffic growth is likely to be driven by the fast-expanding economy, rising wealth, urbanisation and the government-backed Udan (Ude Desh Ka Aam Naagrik) scheme.

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