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SpiceJet places massive Boeing order

Article By: ,  Financial Analyst
March 12, 2014 10:15 AM

Indian airline SpiceJet has confirmed it has placed a massive order for new planes from Boeing, with 42 of the manufacturer's 737 MAX planes being purchased by the company.

However, stocks in Boeing slipped by around one per cent on the back of the news during yesterday's (March 11th) trading session on the New York Stock Exchange.

SpiceJet revealed that it will start to take delivery of the 737 MAX planes from 2017. The plane looks to be a big success for Boeing, which has already received a total of 1,800 orders for its latest model.

The share price of the Indian airline rose by seven per cent following the announcement as investors welcomed the news of the deal, which is believed to be worth about $4.4 billion (£2.7 billion) at list prices.

Airbus battle

Boeing and Airbus are currently in a major battle, with the two major aeroplane manufacturers fighting for the same customers. As it stands, their share of the marketplace is fairly split, but the big order from SpiceJet could see the pendulum start to swing towards Boeing.

"The induction of Boeing 737 MAX will further modernise our fleet, improve customer experience, and ensure that we operate the most efficient fleet well into the future," said S.L. Narayanan, chief financial officer for the Sun Group, which owns SpiceJet. The Sun Group is one of the largest companies in India and also owns several television channels, as well as the airline.

SpiceJet has now ordered about 90 aircraft from Boeing in total and more than 30 of the planes have already been delivered to the Indian airline, enabling it to expand the range of locations it can fly passengers to

Dinesh Keskar, senior vice president of Asia Pacific and India sales for Boeing, stated that the order from SpiceJet is an endorsement in the company's ability to deliver high quality aircraft on time and to budget.

He said: "The capabilities of the 737 MAX supports SpiceJet's mission to become India's preferred low-cost airline. We are very proud to be partners with SpiceJet and a part of the airline's continued success with the addition of the 737 MAX."

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