Skip to content
Search

Latest Stories

India’s SpiceJet buys up to 205 Boeing jets

Indian low-cost airline SpiceJet said Friday (13) it would buy up to 205 Boeing planes worth $22 billion (£18 billion) as it seeks to increase its share of the world’s fastest-growing passenger aviation market.

SpiceJet, which currently has just 49 planes, said the order would enable it to boost its domestic operations and potentially expand into long-haul international flights.


India’s aviation market is growing at double the pace of China’s, as an emerging middle-class takes to the skies.

“This is the largest deal for SpiceJet, it’s one of the largest in Indian aviation and is the largest for Boeing in India,” SpiceJet Chairman Ajay Singh told journalists as he announced the deal.

“We are now in a very good position to expand our network and operations, which includes both domestic and international routes and destinations.”

The deal marks a major turnaround for SpiceJet, whose planes were briefly grounded in 2014 after suppliers refused to refuel them due to unpaid bills.

It has a 13-percent share of the Indian market, behind rivals Indigo, Jet Airways and Air India.

- Vast potential -

The Indian market is seen as having vast untapped potential with fewer than 100 million of India’s 1.2 billion citizens flying on domestic routes last year.

Train travel remains slow and demand for low-cost flights has boomed in the past decade.

The latest industry figures from the International Air Transport Association show India’s domestic air traffic grew 22.3 percent year-on-year in November, followed by Russia at 15.5 percent and China at 14.9 percent.

But most of the country’s airlines are still loss-making and laden with debt, while state carrier Air India has long relied on government support.

Analysts say lower fuel prices and a rise in economic growth have boosted the sector, with domestic traffic up 21 percent last year.

“The airline has done really well from being almost on the brink of closure to nearly seven quarters of profit,” said industry analyst Kapil Kaul.

“The new aircraft order is on expected lines and gives them long-term direction. A positive and long-term story is likely to emerge with this order.”

SpiceJet, the only Indian low-cost carrier with a Boeing fleet, said the first of the new planes would arrive in early 2018.

It currently has just 49 aircraft, putting it well behind the market leader Indigo, India’s only consistently profitable carrier, with 400.

Singh said the deal included 100 737 jets from Boeing’s new Max family of aircraft, which he said would help reduce fuel costs by up to a fifth.

It also includes the option to buy 50 wide-body aircrafts suitable for long-haul flights. The airline currently only flies short-haul international routes.

SpiceJet put the value of the planes at $22 billion (£18 billion) at list prices, although it will likely pay less as discounts for large orders are customary.

The company’s shares have more than tripled since December 2014.

The deal is a boost for Boeing in India, where rival manufacturer Airbus has traditionally dominated.

“India needs 1,850 planes worth $265 billion (£217 billion) in the next 20 years,” said Boeing India President Dinesh Keskar.

“We do expect more orders out of India.”

More For You

Prudential to list Indian asset management venture

Prudential chief executive Anil Wadhwani

Prudential to list Indian asset management venture

INSURER Prudential plc announced that it is considering a partial listing of its stake in ICICI Prudential Asset Management, one of India's leading investment firms. The news sent Prudential's shares soaring by 5.8 per cent to close at 722p on the London Stock Exchange.

The FTSE 100 company currently holds a 49 per cent stake in the Indian joint venture, which market analysts estimate to be worth around £4 billion. ICICI Bank, which owns the remaining 51 per cent, has confirmed its intention to maintain its majority shareholding, emphasising its "long-term commitment" to the partnership that began in 1998, reported the Times.

Keep ReadingShow less
NatWest-Reuters

The bank has set a new performance target, aiming for a return on tangible equity of 15-16 per cent in 2025 and above 15 per cent by 2027. (Photo: Reuters)

What’s driving NatWest’s better-than-expected profit growth?

NATWEST reported higher-than-expected annual profit on Friday, supported by its growth strategy, improved productivity, and capital management efforts.

The bank, which once had assets worth 2.2 trillion pounds—more than twice the size of the British economy—has undergone years of restructuring to focus mainly on domestic consumer and mortgage lending.

Keep ReadingShow less
London business district
A general view shows the London's financial district from an office window in Canary Wharf. (Photo: Getty Images)

Economy grows 0.1 per cent in fourth quarter, defying expectations

THE UK economy expanded by 0.1 per cent in the final quarter of 2024, contrary to forecasts of a contraction, according to official data released on Thursday.

The growth, supported by a stronger-than-expected 0.4 per cent rise in December, offers some relief to chancellor Rachel Reeves as she navigates broader economic challenges.

Keep ReadingShow less
BP-Reuters

Fourth-quarter profit dropped 61 per cent compared to the previous year, marking BP’s weakest results since Q4 2020, when the pandemic reduced global oil demand. (Photo: Reuters)

BP reports lowest quarterly profit in four years, plans strategy reset

BP reported a quarterly profit of £943 million on Tuesday, falling short of expectations and marking its lowest in four years.

The company said it plans a "fundamental reset" of its strategy, days after reports that Elliott Management had taken a stake in the oil major.

Keep ReadingShow less
Shein-Reuters

Shein had aimed to go public in London in the first half of this year, subject to regulatory approvals in the UK and China. (Photo: Reuters)

Shein cuts valuation to £40 billion for London listing

SHEIN is preparing to lower its valuation to around £40 billion for a potential initial public offering (IPO) in London, according to three Reuters sources familiar with the matter.

This is nearly 25 per cent lower than the company's 2023 fundraising valuation as it faces increasing challenges.

Keep ReadingShow less