SpiceJet In Talks With Boeing, Airbus For Jet Deal

Indian budget airline SpiceJet is in talks with Boeing and Airbus to acquire about 100 new narrow-body jets, in a deal that would be worth about USD$11 billion at list prices.

SpiceJet wants to buy more Airbus A320neo and Boeing 737 MAX aircraft, chief financial officer Kiran Koteshwar said, as it looks to rebuild its business after almost collapsing last year.

Koteshwar said the company plans to place an order, which would be its biggest ever, by the end of this financial year and would look to raise new equity or debt to pay for the planes once it had decided how many to buy.

"We have to place an order so we have a long-term business plan in place. The focus is now on sizeable growth," he said.

SpiceJet's expansion plans come after it almost collapsed, before being bailed out by new chairman Ajay Singh in January.

the airline's market share has shrunk to 12 percent in June from around 20 percent a year ago after it cut capacity to stay in business.

India's airlines are expanding their fleets as they compete to win a bigger slice of what is one of world's fasting growing markets for air travel but one where most players are plagued by losses as the fight for passengers pushes ticket prices below costs.

Rival IndiGo, which is profitable and the largest Indian airline by market share, has kept costs low in part by placing large orders for a single type of plane through the sale and leaseback model.

Koteshwar said any new order would largely be on a sale and leaseback model, and that a big order would help it to keep future costs lower.

"SpiceJet has always been constrained by the lack of long-term orders. This will give us economies of scale and for our vendors and suppliers to see that we are growing," he said.

SpiceJet reported a INR718.5 million rupee net profit on Tuesday for the three months ending in June, against a ONR1.24 billion loss last year, after falling oil prices and a cost-cutting drive outweighed a slump in revenues.