By Santanu Choudhury/ Bloomberg
SpiceJet Ltd., India’s second- biggest low-fare airline, will buy 10 new planes from Boeing Co. for as much as $400 million, exercising options announced in February last year.
New Delhi-based Spice, which reported a net loss of Rs213.7 million in the three months ended 28 February, will take delivery of the Boeing 737-800 planes after October 2009, Partha Basu, the chief financial officer, said on23 April.
Indian carriers have ordered more than 450 planes from Boeing and Airbus SAS, valued at about $30 billion, in the past four years. SpiceJet, in which Goldman Sachs Group Inc. is an investor, is buying more planes as it competes with low-fare airlines such as Deccan Aviation Ltd. and GoAirlines (India) Pvt.
“The board has given an in-principle approval to the proposal at the end of March,” Basu said in an interview in New Delhi on23 April. “The board is meeting tomorrow to pass this resolution.”
India, the world’s second-fastest growing major economy, will need 700 more planes by 2020 to support an anticipated growth in air travel, Ashok Chawla, the country’s civil aviation secretary, said.
By then, the country may require investments of as much as $120 billion to meet an estimated six-fold increase in domestic passenger traffic to 180 million passengers a year, Chawla said.SpiceJet is working on “funding options” to buy the new planes, Basu said.
SpiceJet, which began operations in May 2005, has a fleet of 11 single-aisle Boeing planes, which will be increased to 19 planes by March 2008, Basu said.
“We will be breaking even in this financial year ending March 2008 and we are hopeful of a profit in fiscal year 2008- 09,” Basu said.
Shares of SpiceJet gained as much as 4.7% to Rs46.7 on the BSE on 23 April. They closed 0.9% higher at Rs45.