New Delhi: Gurgaon-based airline firm SpiceJet Ltd plans to order new planes later this fiscal in a deal that could decide if it will retain its fleet of jets made by Boeing Co. or phase out its planes and move to an all Airbus SAS fleet, a top company official said.
Low-cost airlines in other parts of the world have replaced fleets based on economic and expansion requirements. London-based EasyJet Airline Co. Ltd started with an all Boeing fleet and then placed a massive order of 120 Airbus-made A320s in December 2002. EasyJet still has about 30 Boeing 737 planes.
Air Asia Bhd, too, started with a Boeing fleet and then ordered A320 jets and is now an all Airbus operator. RyanAir Plc., which runs a fleet of 174 all Boeing 737 aircraft, recently said it is in talks to place orders for 300-400 short-haul jets and could choose either Airbus or Boeing.
Low-cost carriers typically stick to planes from one manufacturer to save on operating and maintenance costs that can be pared with benefits of scale.
SpiceJet, which started operations in 2005, has 19 aircraft currently with nine more on order that will join from early next year. The firm’s chief executive Sanjay Aggarwal said the airline is even open to a fleet with planes from both Boeing and Airbus in a transition phase, if the firm decides to opt for planes of the European maker.
Almost all of the airline’s planes currently are on lease, allowing it flexibility of giving them up. SpiceJet controls 12.1% of India’s air passenger market in the three months to March, government data show.
An analyst said SpiceJet’s stance could possibly be to bargain for a better deal from plane makers as it prepares to expand. “These are just tactics at this early stage of their decision-making,” said Kapil Kaul, India chief executive officer for Centre for Asia Pacific Aviation, an aviation consultancy firm.
Both Boeing and Airbus have received few orders in the last quarter of the fiscal gone by and local airlines hope this could be the right time to secure good deals. Airlines have cancelled orders for 32 Boeing aircraft meant for delivery in 2009, leaving it with just 28 firm orders for the year.
On Thursday, shares of SpiceJet rose 0.62% to Rs16.29 a share on the Bombay Stock Exchange, whose benchmark Sensex index fell 3%.