SpiceJet strikes Rs. 1.5 lakh cr deal with Boeing for 205 planes

PTI

In one of the biggest deals in the Indian aviation sector, SpiceJet will purchase up to 205 new aircrafts from Boeing with the order valued at Rs.1,50,000 crore.

With the earlier order for 55 planes and additional 100 new 737-8 MAX aircrafts, the no-frills carrier now has firmed up order for a total of 155 planes, besides purchase rights for 50 B737-8 MAX and wide body aircraft.

Announcing the deal in New Delhi 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 and the largest for SpiceJet,” Singh said.

Currently, the budget carrier has 32 next generation B737s and 17 Bombardier Q400s.

“We are honoured to build upon more than a decade of partnership with SpiceJet with 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 the induction of the new aircrafts, which burn 20% less fuel, would help SpiceJet reduce costs and enhance its ability to compete.

“This is a composite transaction for purchase of up to 205 aircraft valued at $22 billion,” Singh said, adding that the focus is on growing the airline in a responsible and profitable manner.

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.

In the 2016 July-September quarter, the airline had posted its highest-ever quarterly profit of Rs.59 crore. In the year-ago period, the same stood at Rs.29 crore.