Forbes India 15th Anniversary Special

SpiceJet signs deals worth $5.5 billion at Paris Air Show

The deal with Bombardier is a step at increasing its regional footprint in India and international destinations

Published: Jun 20, 2017 04:50:01 PM IST
Updated: Jun 20, 2017 05:18:37 PM IST

SpiceJet signs deals worth .5 billion at Paris Air Show
Ajay Singh, chairman and managing director,  SpiceJet
Image: Amit Verma

 
Budget airline SpiceJet has placed a firm order for 25 Q400 aircraft with Canadian aircraft manufacturer Bombardier. The move comes as it looks to grow its regional footprint in India and nearby international destinations such as Sri Lanka.

The deal with Bombardier, which was announced at the Paris Air Show on Tuesday, is valued at approximately $805 million with each Q400 aircraft sporting a price tag of about $32.2 million. In addition, SpiceJet has taken the purchase rights for 25 additional Q400 aircraft.

SpiceJet also announced on Monday that it would buy 20 737-10 MAX from aircraft manufacturer Boeing for a consideration of $4.7 billion. This is over and above its previous order of 100 737 MAX series of aircraft it placed with a Boeing earlier this year, a deal valued at $11 billion. SpiceJet along with Indonesian carrier Lion Air would be the launch customers of the 737-10 MAX.

At present, SpiceJet operates a fleet of 20 Q400 aircraft which would grow to 45 by 2020. “We will add one plane a month from early 2018,” Ajay Singh, chairman and managing director of SpiceJet, said on the sidelines of the Paris Air Show. “When you want to fly short-haul routes on jets (like the 737), it's very expensive because the engineering cost is high,” he added.

The 80-seater Q400s would serve SpiceJet’s plan of expanding its regional footprint that is being aided by the Indian government’s Regional Connectivity Scheme, Udan. Through the scheme SpiceJet has won bids to fly to 11 regional cities some of which include Khandala, Porbandar, Jaisalmer, Kanpur, and Puducherry. Beginning July 10, the airline will operate flights from Mumbai to Khandala and Porbandar.

“We feel there is a lot of potential for the aircraft (Q400) on international sectors… for example, flights to Colombo,” added Singh. SpiceJet already operates from its existing fleet of Q400s flights from Kochi to Male, and Kolkata to Dhaka.