NEW DELHI: With an order
for 42 Boeing 737 Max worth $4.4 billion from crisis-ridden SpiceJet,
the US aircraft major hopes that SpiceJet's strategy of "shrinking now
and expanding later" - a reference to SpiceJet's ruthless fleet
reduction - would work.
Boeing commercial
airplanes (VP-sales) Dinesh Keskar was in India recently and told TOI
that the delivery of 737 Max to SpiceJet, Boeing's answer to Airbus'
hugely successful A320 Neo, begins from 2018 onwards and by then the low
cost carrier (LCC) "will find a way out".
SpiceJet had ordered 42
Boeing 737 Max at the Hyderabad air show this March. But today, the LCC
is struggling to survive by returning planes, cutting flights
drastically and its auditors casting aspersion on its claim of being a
going concern.
"I am not much worried.
They will find a way. Their strategy is of shrinking now and expanding
later. When you are hurting, the last thing you want to do is expand.
Anyway, SpiceJet is supposed to start getting the Max from 2018
onwards," Keskar said. SpiceJet is today flying just 22 Boeing 737s -
down from 35 in summer - and has cut over 50 daily flights reportedly
due to a lack of funds that saw leasors taking back planes.
Asked won't the going get
tougher for existing carriers, including SpiceJet, when Tata-Singapore
Airlines JV airline starts flying soon and when Tata-AirAsia JV expands
its wings, Keskar said: "Thanks to oil prices, airline operating costs
have fallen. With those reduced costs and the current fare levels, the
average gap in break-even price per ticket is just $10 (Rs 600-700).
Indian carriers will be in profit during this peak holiday season." He
added that SpiceJet will be able to deploy its smaller fleet more
gainfully.While aircraft manufacturers keep their fingers crossed for
airlines - remember the hit Airbus took when its customers Air Deccan
and Kingfisher folded up with the latter having placed orders for five
A-380s that were written off only recently - SpiceJet is fighting for
survival. The directorate general of civil aviation (DGCA) has asked the
LCC to give weekly status reports on its payables to various agencies.
Top DGCA officials say
the airline has informed them that as many as 116 pilots have resigned
and are serving notice period till mid-2015. While multiple top
officials of DGCA confirmed getting this information from SpiceJet, the
airline denied having giving any such information to the regulator when
reached for comment.
On its part, SpiceJet
says it is cutting Boeing fleet to get out of unfavorable leasing
contracts. "We are revamping the fleet to come out stronger and shed
unfavorable contracts and unwanted aircraft. We are doing this as part
of turnaround process.... (Our) schedule reduction is about 50," Kapoor
had told TOI last Sunday, while claiming that the airline's Boeing 737s
fleet will grow to about 30 by the year-end.
- Source: http://timesofindia.indiatimes.com
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