Hyderabad: Low-fare airline SpiceJet, which has placed an order of 205 Boeing airplanes, will take the delivery of its first such aircraft, the Boeing 737 Max, by August, and another 14 Max airplanes by March 2019, chairman Ajay Singh said.
“The induction of Boeing 737 Max gives us some additional range and the plane can fly about an hour longer than the existing version,” Singh said, adding the airline is looking to fly profitable routes.
“Obviously, more opportunities open up on the international side that did not exist so far. So we take a call on whatever route is profitable—some of them are domestic while others international,” Singh said, adding it opens up potential routes like Delhi-Colombo.
Fuel-efficient Boeing 737 Max planes are also expected to bring down fuel costs of SpiceJet by about 15%, while engineering and maintenance costs are expected to come down by 10-15%, Singh added.
In January 2017, SpiceJet had placed an order for 205 Boeing aircraft valued at $22 billion or Rs1,50,000 crore at list price. With the earlier order for 55 planes and 100 additional 737-8 MAX aircraft, the airline firmed up order for 155 planes, besides purchase rights for 50 B737-8 MAX and wide body aircraft.
SpiceJet, which currently has 60 aircraft (38 Boeing 737 and 22 Bombardier Q 400), controls 14.48% market share of the domestic air travel market in India.
“All the funding for aircraft that is delivered to us during 2018 and 2019 has been completed,” Singh said, adding that all these aircraft are on sale and leaseback model.
A sale and leaseback model is common in the airline business. Airlines sell their planes to a lender, a process that helps them generate revenue, and then lease the same planes for a fee.
SpiceJet is also expected to extend the memorandum of understanding (MoU) for purchasing sea planes by a year, Singh said.
“The government is still formulating rules for seaplane operations. Since the government feels stringent rules, safety rules, should be in place, so let them come up with rules first,” he added.
SpiceJet plans to buy more than 100 amphibian aircraft and had conducted seaplane trials at the Girgaum Chowpatty off the Mumbai city coast in December 2017. The demonstration flight was carried out in association with Japan’s Setouchi Holdings.
Singh said it is important that Indian airlines carry Indian passengers to long haul destinations and for this, Indian airports need to be used as international hubs.
“I feel that it is time for airlines in India start to carry their own passengers (instead of feeding to international carriers) on long-haul flights. The question is can we do it economically and comfortably,” he said.
“That is some thing we along with all other Indian carriers are exploring. And at some point, it has to work,” he added. Long haul flights are typically ones which are over 7-8 hours long and connect India to Western Europe and American destinations.
He suggested the government develop a scheme for making Indian airports into international hubs. SpiceJet will be launching its first flight under the second phase of regional connectivity scheme by May, Singh added.