The Hindu Business Line : Boeing bags SpiceJet deal for ten 737-800s

THE competition between Boeing and Airbus is hotting up for the Indian skies. In the latest round, Boeing has bagged an order from another low-cost carrier, SpiceJet, to supply 10 737-800 planes, worth $630 million.

"SpiceJet has placed a firm order for 10 planes valued at $630 million at list prices and has options for 10 more. The first delivery is scheduled for 2006," the Boeing Aircraft Trading President, Mr Dinesh Keskar, told newspersons at the Aero India 2005.

India's first low-cost carrier Air Deccan recently signed a deal with Airbus Industrie for acquisition of A320s worth over $1.8 billion over a period of five years. Airbus has also bagged an order from Kingfisher Air for supply of an equal number of aircraft worth $1.8 billion.

This is the first time in Aero India's history that a commercial deal involving acquisition of commercial jets has been signed at the air show.

Mr Keskar said SpiceJet would begin domestic services in May with three leased Boeing 737-800s. The airline plans to offer fares 30-40 per cent below those of full-service carriers. It said it would keep overhead costs low by selling food and beverages on flights.

SpiceJet is one of nine no-frill airlines in the country which have applied for licences in the past year after the Government allowed domestic airlines to cut fares and increase air travel.

"The low-cost phenomenon is here to stay. There is room for airlines such as SpiceJet in India," Mr Keskar said. "We choose our partners carefully," he added. Boeing is also bidding for orders from Indian Airlines and Air India.

The SpiceJet Director, Mr Ajay Singh, said his company hasraised over Rs 100 crore recently from private and institutional investors to acquire aircraft and launch the airline.

"The purchase of the 189-seater all-economy class aircraft will be done through financing from international institutions," he said. He said the airline may raise between Rs 300 crore and Rs 400 crore more to fund acquisition of aircraft.

Overall, the 737 family is the world's largest best-selling commercial jet plane, with more than 5,500 ordered by 220 customers.

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