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SpiceJet to buy more planes from Bombardier for shorter routes

LiveMint logoLiveMint 20-06-2017 Tarun Shukla

New Delhi: Budget airline SpiceJet Ltd plans to buy more Bombardier-made Q400 regional planes, the airline said on Tuesday.

The airline said it signed a letter of intent (LoI) with Bombardier at the ongoing Paris Air Show to buy as many as 50 Q400 turboprop planes, which include 25 Q400 turboprops along with purchase rights for the rest.

Airlines typically do not pay when they sign a letter of intent, but have to make a small payment of up to 5% of cost of the plane for firming up the order.

ALSO READ: Bombardier wins $1.7 billion order from SpiceJet

SpiceJet operates a fleet of 35 Boeing 737s and 20 Bombardier Q400s. The existing Q400 aircraft have a 78-seat configuration while the new planes will be 86 seaters, SpiceJet said.

“This order will help us further increase connectivity to smaller towns and cities,” said Ajay Singh, chairman and managing director, SpiceJet.

The airline did not say when it will give firm orders. 

SpiceJet stock rose 1.65% on Tuesday to Rs126.60 on BSE, while Sensex fell 0.04% to 31,297.53 points.

SpiceJet will introduce its first flight under the Udan scheme to Porbandar and Kandla next month

Aviation secretary R.N. Choubey, who has steered the government’s ambitious subsidy-led regional air connectivity scheme Udan, was also present at the event.

“This latest aircraft order by SpiceJet, which has been an enthusiastic supporter and participant of India’s regional connectivity scheme, will help further take forward the government’s vision to provide air connectivity to the common man,” Choubey said in the same statement. 

Rival IndiGo has already announced plans to tap the regional space and participate in the government’s Udan scheme. The airline has announced it plans to buy 50 ATR turboprop planes that will be inducted from the end of the year.

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It showcased its new ATR planes with multicoloured engine blades at the Paris Air Show.

SpiceJet will introduce its first flight under the Udan scheme to Porbandar and Kandla in Gujarat next month, joining Air India and TruJet in starting such flights. 

The two routes—Mumbai-Porbandar-Mumbai, Mumbai-Kandla-Mumbai—will be operational with a Bombardier Q400 planes from 10 July.

 Under the Udan scheme, the airline will operate new flights on the Mumbai-Porbandar route with Rs2,250 (all inclusive) fares while the fare on the Mumbai- Kandla and Kandla-Mumbai routes would be Rs2,500 (all inclusive) for Udan seats. 

To be sure, regional airlines are having a tough time to scale up and sustain.

In the last one year, three airlines have shut shop, including Air Costa, Air Carnival and Air Pegasus.

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