SpiceJet inks deal with Boeing for 205 aircrafts worth Rs 1.5 lakh crore

With this deal, SpiceJet has enhanced its existing order of 55 aircraft with additional 100 firm B737-8 MAX and 50 purchase rights for B737-8 MAX and wide-body aircraft.

An agreement with SpiceJet, would be a much-needed boost for Boeing in India, as its rival Airbus has won record-sized orders with InterGlobe Aviation's IndiGo, India's biggest budget airline, as well as a recent deal with GoAir.

SpiceJet had placed its first order with Boeing in 2005 for Next-Generation B737s and currently operates 32 Next-Generation B737s in its fleet and 17 Bombardier Q400s.

Announcing the deal here today, SpiceJet Chairman and Managing Director Ajay Singh said, “Our turnaround story has been one which has very few parallels in the world today and we are proud of it. SpiceJet has achieved seven consecutive quarters of profit, highest on-time performance and lowest cancellation rates; a record load factor of over 90% every month for 20 months in a row – a feat that has no parallel in aviation history."

“We are now in a very good position to expand our network and operations which includes both domestic and international routes and destinations,” Singh said.

“The Boeing 737 class of aircraft has been the backbone of our fleet since SpiceJet began, with its high reliability, low operation economies and comfort. With the next generation of B737 and the B737 MAX we are sure that we can be competitive and grow profitably,” he added.

The B737 MAX incorporates the latest technology CFM International LEAP-1B engines, Advanced Technology winglets and other improvements to deliver the highest efficiency, reliability and passenger comfort in the single-aisle market.

The new airplane will deliver 20 percent lower fuel use than the first Next-Generation B737s and the lowest operating costs in its class – 8 percent per seat less than its nearest competitor.

India is the world's fastest growing aviation market and among the most attractive for plane makers seeking a new wave of growth.

Indian passenger numbers are increasing by more than 20 percent annually thanks to low prices and rising disposable incomes.

Under chairman Ajay Singh, SpiceJet has been rebuilding its business since almost collapsing after running out of cash in late 2014.

The airline has grown its market share and returned to profitability but it remains far smaller than market leader IndiGo.

Despite soaring passenger numbers, Indian carriers have struggled to achieve consistent profitability because of fierce competition, regular price wars and high operating costs.