SpiceJet to operationalize 30 grounded planes, resume delivery talks with Boeing
- India needs to have more airlines to prevent the market from becoming a duopoly, SpiceJet CMD Ajay Singh said. The airline aims to have a fleet of 100 aircraft by the end of 2026, from the current 28 operational aircraft. India's aviation market is dominated by IndiGo and Air India.
New Delhi: Budget carrier SpiceJet Ltd. aims to operationalize 30 Boeing 737 MAX aircraft, grounded due to reasons ranging from payment default to lessors and component shortages, in the next 12-15 months as it seeks to increase its operations.
Speaking at the company's annual general meeting on Monday, chairman and managing director Ajay Singh also hinted at resuming talks with aircraft manufacturer Boeing for pending deliveries. The airline had placed an order for 200 B737 MAX aircraft with the American company in 2017.
Singh said, “We will restart our talks with Boeing, we received 13 aircraft, we will talk with the company to restart deliveries, hopefully we can do this in the upcoming months.”
India needs to have more airlines to prevent the market from becoming a duopoly, Singh said. The airline aims to have a fleet of 100 aircraft by the end of 2026, from the current 28 operational aircraft. India's aviation market is dominated by IndiGo, the country's largest airline, and the Tata Group-owned Air India.
Also read: SpiceJet insolvency claims: Are creditors leveraging IBC forum for settlements?
Experts see SpiceJet’s announcement on ungrounding and restarting delivery talks with Boeing as a welcome step for the market. Sanjay Lazar, CEO of Avialaz Consultants, said, “The announcement by the CMD is a bold move in the strangled Indian aviation market. The current duopoly needs to be challenged by both SpiceJet and Akasa and more newcomers. The addition of fresh capacity and accelerated deliveries by Boeing would mean a significant uptick in SpiceJet's flying portfolio. It could also bring about a cooling of airfares for the passengers and add more frequencies on demand-hungry sectors."
Lazar feels that there is a need to have a stronger operations team to regain its position in the skies. He added, “While ramping capacity, at the same time if SpiceJet can improve passenger services and tighten up OTP (on-time performance), they will rebuild consumer confidence with the brand.”
Earlier this year, the cash-strapped airline raised ₹3,000 crore through a qualified institutional placement to operationalize its grounded planes, and expand into new markets. Singh also mentioned that at this point, the purpose of the secured funding is to strengthen the airline and investors need to have patience on interim dividend. Singh hopes that the shareholders will be rewarded with a higher share price in the future as the airline rebuilds itself.
Also read: Spicejet claims it has cleared pending employee provident fund dues
The airline currently has 147 daily flights and flies to 38 domestic and 3 international destinations. Currently, the airline has 30 Boeing, 24 Q400 aircraft and 6 wet leased aircraft in its fleet, with only 28 aircraft being operational currently. The airline earlier this month entered into an agreement with US-based maintenance, repair, and overhaul company StandardAero Inc. to restore grounded Boeing 737-8 MAX fleet. Three aircraft are expected to be join the fleet by April 2025.
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First Published:30 Dec 2024, 07:03 PM IST
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