Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / Jet may order more planes, says Boeing executive
BackBack

Jet may order more planes, says Boeing executive

A sharp fall in jet fuel price in the last year has buoyed profits at local airlines, which are preparing to bulk up their fleets

Jet Airways, founded by Naresh Goyal, announced a rare third-consecutive quarter profit last week. The Rs467.11 crore profit was also a record quarterly profit for the airline. Photo: MintPremium
Jet Airways, founded by Naresh Goyal, announced a rare third-consecutive quarter profit last week. The Rs467.11 crore profit was also a record quarterly profit for the airline. Photo: Mint

New Delhi: Steady profits recorded in recent quarters may prompt Jet Airways (India) Ltd to place another large aircraft order, a top official at aircraft maker Boeing Co. said, three months after India’s second largest airline by revenue said it will buy 75 Boeing 737 MAX aircraft, valued at about $8 billion.

“Jet is done with their 75. I think what I find is typically, when airlines get profitable continuously—now it’s been three quarters—people feel like okay, I want to do something and I think we are coming to that stage," Boeing’s Asia-Pacific senior vice-president (sales) Dinesh Keskar said in an interview.

A sharp fall in jet fuel price in the last year has buoyed profits at local airlines, which are preparing to bulk up their fleets.

Jet, founded by Naresh Goyal, announced a rare third-consecutive quarter profit last week. The 467.11 crore profit was also a record quarterly profit for the airline.

Rival IndiGo posted 657.28 crore in quarterly profit, up from 531.56 crore in the year-ago period. SpiceJet Ltd, the third listed airline, also posted a net profit of 238.39 crore in the quarter, its highest ever, against a net loss of 275.02 crore in the year-ago period.

Keskar said the order for 75 planes was not even sufficient to replace Jet’s existing fleet. Jet has about 115 planes in its fleet, including wide-body planes for international flights.

He sees Jet looking at 50-75 planes soon.

“By the way, that Jet order is not even enough to replace what they have today. It depends on what growth they will want to follow, which I won’t know. But I would say clearly another 50-75 just to keep up with growth. Minimum. Of course, only they can tell the best numbers. But I think there is potential for that to happen," Keskar said, without specifying when he expects these orders to be placed.

Jet did not deny the possibility of another plane order.

“The new Boeing 737 Max aircraft will replace our existing fleet of 737s," a Jet Airways spokesperson said. “This fresh aircraft order for next-generation aircraft currently meets our planned requirements and also demonstrates the importance we place in continuing to provide a best-in-class full service travel experience to our guests."

A profitable and aggressive SpiceJet has said the airline was looking to order about 100 planes.

Keskar said the airline was in talks with SpiceJet for narrow-body planes. It will also deliver six Boeing 737 New Generation (NG) planes to Air India Express this year. The delivery of three Boeing 777s long haul jets for Air India will start in 2017. Jet will be the first customer in India to get the fuel-efficient Boeing Max plane the year after.

The domestic air passenger market gathered pace in 2015, with traffic growing 20%.

Scheduled Indian airlines have a combined fleet of 412 aircraft and 720 planes on order, including IndiGo’s 430.

“Another 250-300 in aircraft orders are expected to be announced in the next few months with order from SpiceJet, possibly by the end of this fiscal," said Kapil Kaul, South Asia CEO of consulting firm Capa Centre for Aviation.

India will also host its fifth civilian air show, India Aviation, in March this year at Hyderabad. At the last air show held two years ago, SpiceJet placed an order for Boeing planes valued at $3.9 billion.

It is not yet clear if this year could see another round of plane orders.

“There is no rush," Kaul said, “but airlines are placing long-term scale bets, which has become a strategic imperative."

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 09 Feb 2016, 02:40 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App