Thursday, September 16, 2010

SpiceJet's $2.7-b fleet expansion cleared for take off

Delhi based low-cost airline SpiceJet has been given in-principle approval by a Government committee to import 30 Boeing 737-800 aircraft. In July, the airline had signed an agreement with Boeing to purchase the 30 aircraft at an estimated value of $2.7 billion.

The airline's proposal for import of aircraft was among the several cleared by the Empowered Committee of the Ministry of Civil Aviation that gives airline operators permission to import aircraft. The Committee also cleared a proposal of IndiGo Airlines to import 14 A-320 aircraft during calendar year 2011-12. JetLite too has been allowed to import two Boeing 737-800 aircraft in November.

SpiceJet, which currently has 21 Boeing 737 aircraft, plans to induct 30 Boeing 737s over four years beginning 2014. The aircraft acquisition deal was announced shortly after the Sun TV chief, Mr Kalanithi Maran, acquired a 37.5 per cent stake in June.

“We expect domestic demand to grow at 16 per cent during the current year and to sustain a 12-14 per cent annual growth going forward in the medium term. This growth will necessitate significant capacity induction and the fresh order will ensure that the airline will remain in the growth story in the Indian skies,” the airline Director, Mr Kishore Gupta, had told newspersons after the deal for acquiring 30 aircraft was signed.

The low-cost airline reported a profit after tax of Rs 55.22 crore for the quarter ended June, 2010, compared with a profit of Rs 26.34 crore for the same quarter the previous year.

SpiceJet, which carried 54.46 lakh passengers during calendar 2009, has flown 37.25 lakh passengers during the first seven months of the current year.

The airline, which meets the Government requirements of having completed five years of domestic operations and having a fleet of 20 aircraft for starting international flights, has been permitted to start international operations. It plans to launch regular services to Dhaka, Male and Kathmandu. It also plans to expand its domestic network, officials had indicated in July.

Source: The Hindu Business Line

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