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Regular-article-logo Sunday, 06 October 2024

SpiceJet tilts towards Airbus

SpiceJet looking to buy 100 Airbus planes

Our Special Correspondent New Delhi Published 25.09.19, 07:21 PM
SpiceJet operates Boeings. Airbus will create challenges of integration.

SpiceJet operates Boeings. Airbus will create challenges of integration. (Shutterstock)

Budget carrier SpiceJet is exploring the possibility of ordering 100 Airbus planes, risking itself to the problems of having both Airbuses and Boeings in its fleet amid growing uncertainty over the fate of its grounded Boeing 737 Max 8s even as it tries to expand capacity to make the most of the opportunity offered by the slots vacated by Jet Airways.

“Airbus has pushed us hard since the day we started flying Boeing aircraft, and of course with the current problems, they’ve pushed us harder. They have made us a commercial offer and we are evaluating it,” Ajay Singh, chairman, SpiceJet, said in an interview to a business wire service in New York.

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He, however, did not explain the size of the potential deal with Airbus but confirmed that any aircraft order that SpiceJet would place in the future would not be less than 100 aircraft, worth $13 billion to Airbus or Boeing.

An absence of adequate capacity will make it hard for the airline to fly the slots vacated by Jet. The government has allowed for the temporary use of the slots of Jet till December.

The NCLT, meanwhile, on Wednesday had directed the lenders of Jet to offer some interim lifeline funds within 15 days, which could be the start of a long recovery process for the airline.

Aviation analysts said the tilt towards Airbus is an attempt to pressure Boeing to act on the 737 Max 8s that have been grounded worldwide following the crashes in Ethiopia and Indonesia

SpiceJet has ordered 155 Boeing aircraft with purchase rights for an additional 50 737 MAX 8 and wide-body planes. The airline has taken delivery of 13 Boeing 737 MAX 8s — none of them operational.

The shift away from Boeing won’t be an easy one. Ajay Singh said the company’s entire infrastructure was built around Boeing, and that it would take the final call only if the problem with 737 Max planes was not addressed.

“It’s not the easiest thing in the world to do, of course. Our entire infrastructure is geared for a Boeing fleet but if this takes too long, we may not have too much of a choice,” he said. Budget carriers globally do not opt for a mixed fleet as it increases the operational cost.

Some carriers globally have started to experiment with different options given the uncertainty over the Boeing Maxs, the analysts said.

SpiceJet is a major buyer of Boeing’s now grounded Max aircraft and is mulling the purchase of a sizable number of Airbus A321LRs and XLRs.

Hope for Jet

The National Company Law Tribunal (NCLT) on Wednesday directed the financial creditors of the grounded Jet Airways to release some interim lifeline funds within 15 days. The lenders had in-principle sanctioned Rs 63 crore to the resolution professional and the SBI, the lead lender, had reportedly disbursed its portion of Rs 10 crore.

However, other lenders such as Yes Bank, Punjab National Bank, IDBI Bank, Bank of India, Indian Overseas Bank and Axis Bank are yet to release their portion.

Therefore the tribunal has directed these lenders to release the amount within 15 days.

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