Jet inks deal to buy another 75 Boeing-737 Max aircraft

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Mumbai | Published: June 26, 2018 5:20:59 AM

With this move, Jet’s total number of aircraft of this single-aisle type stands at 225 and at the current list price of the aircraft at $102.2 million, the value of Jet’s latest order is estimated at $7.6 billion.

Jet will use its existing order for fleet replacement and only a few will be utilised for expansion.

Jet Airways said in a stock exchange filing on Monday that it has entered into another agreement with US aircraft manufacturer Boeing to purchase an additional 75 Boeing-737 MAX aircraft. It, however, did not get into the specifics of such an agreement and if it is a binding one or not. Also, no value was assigned to the deal. Sources say deliveries for these will start from 2025.

This is Jet’s third purchase agreement for the 737 MAX aircraft with Boeing; previous orders of the airline were in two tranches of 75 aircraft each, the latest being in March. As Jet launched its flights from Mumbai to the UK city of Manchester in March, it had stated that the airline was mulling a follow-on order for the Boeing 737 MAX aircraft.

With this, Jet’s total number of aircraft of this single-aisle aircraft stands at 225 and at the current list price of the aircraft at $102.2 million, Jet’s order value is estimated at $7.6 billion. It must, however, be noted that the airlines do not pay the list price as these are negotiable and with Jet’s order being the third, it is understood that Jet must have cut a sweet deal with Boeing that will also look at keeping its edge in terms of fleet share in the Indian market. Jet has also not specified the variants — Max 9 and 10 — for this order. Last week, Jet inducted the first of the Boeing 737 Max aircraft in its fleet from the previous order.

Jet will use its existing order for fleet replacement and only a few will be utilised for expansion. The new order is seen as the one where the airline will add capacity. In its investor call in May this year, Jet had said that it would add 11 Boeing 737Max aircraft to its fleet by the end of this financial year, and will deploy some on domestic routes and others on medium-haul international flights.

Jet, with a market share of a little over 15%, has not expanded its fleet to add capacity in the domestic market and this has been one of the key reasons for the airline’s inability to capture market share domestically, despite India’s domestic aviation market growth of 22% year on year. IndiGo, the market leader, has aggressively expanded and commands a 41%market share.

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