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SpiceJet orders new Boeing planes on buoyant outlook

SpiceJet orders new Boeing planes on buoyant outlook
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First Published: Tue, Jul 27 2010. 07 39 PM IST
Updated: Tue, Jul 27 2010. 07 39 PM IST
New Delhi: Budget carrier SpiceJet Ltd, which is all set to fly international routes this year, has ordered 30 Boeing aircraft worth $2.7 billion for delivery from 2014.
The Gurgaon-based carrier will also add 15 aircraft in the next two years of which seven aircraft will be added in this fiscal, director Ajay Singh told reporters on Tuesday.
“As the aviation sector grows low-cost airlines are expected to do very well. We expect SpiceJet to take a disproportionate share of the growth,” Singh said.
The fresh orders were for Boeing 737-800 aircraft. SpiceJet currently has a fleet of 21 Boeing 737-800 and 737-900 aircraft and has about 13% share in the domestic market. The new aircraft could be owned or taken on lease, Singh said. All its existing aircraft are on lease.
SpiceJet is expected to start international operations by September 2010 and has already received permission to fly to Dhaka, Kathmandu and Male.
Last month, Sun TV founder Kalanithi Maran and his unlisted firm Kal Airways agreed to buy 37.7% in Spicejet and also made an open offer for a further 20%.
According to a public announcement of the open offer, the acquirers, subject to regulatory approval, also proposed to change the name and registered office of SpiceJet upon the offer completion and acquisition of shares.
Singh on Tuesday said the firm has no plans to re-brand the airline or shift its head office, though the registered office might be shifted to Chennai, where Maran is based.
It also has no plans currently to raise funds, Singh said.
Earlier on Tuesday, SpiceJet reported a net profit of Rs55.2 crore in the June quarter compared with Rs26.3 crore a year ago as net sales rose nearly 35% to Rs708 crore.
Its load factors for the quarter rose to 88% from 76% and operating margins expanded to 8.3% from 4%.
India’s aviation industry is witnessing a turnaround following an economic recovery and a surge in air traffic. Domestic airlines carried about 22% more passengers between January and June 2010 from a year ago, government data showed.
Rival Jet Airways (India) Ltd, India’s top private carrier by sales, swung to profit in the June-quarter, while rival Kingfisher Airlines reported a narrower loss.
“We expect the industry to grow by 16% this year and are confident that we will continue to outperform the industry,” SpiceJet said in a statement.
Shares in Spicejet, which the market values at about Rs2,100 crore, closed up 0.27% at Rs56.05 in a firm Mumbai market.
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First Published: Tue, Jul 27 2010. 07 39 PM IST