Indian carrier SpiceJet is rumored to be in talks with Boeing at this week’s Dubai Airshow in regard to the 737 MAX. The carrier is already the second-largest customer of the type, but is reportedly in discussions to order more, with chairman Ajay Singh hoping to secure them at a knockdown price.
Welcome support for the MAX
Boeing’s 737 MAX has been struggling for support since two fatal crashes saw the entire fleet grounded worldwide. Other than a surprise 200 aircraft order at Paris Air Show earlier this year, there has been very little in the way of interest in the type. However, it now seems Boeing could be on the verge of a welcome revival for its narrowbody, as Indian carrier SpiceJet is reportedly close to making an order.
In an interview with Bloomberg at the Dubai Airshow, SpiceJet Chairman Ajay Singh said that the current lull in sales could allow SpiceJet to purchase the plane at a heavily discounted cost. He confirmed that talks with Boeing are ongoing, but says that the size of the order hasn’t yet been determined.
A major customer of the MAX
SpiceJet is already a customer of the 737 MAX, with 13 already delivered prior to the worldwide grounding. The airline has another 193 on order already, making it the second biggest customer of the MAX 8 behind Southwest Airlines. A further order, if it exceeded 80 planes, could put it ahead of the US low-cost carrier.
However, SpiceJet hasn’t got off lightly in terms of the impact of the grounding. Just this week the company posted a loss of 426.6 crore ($59.5m) in the three months preceding September. It attributed this loss largely to the impact of not having the MAX in its fleet, issuing a statement which read:
"With the grounding of Boeing 737 MAX, the company continues to incur various costs and losses with respect to these aircraft. The company is in the process of determining the costs and losses (including opportunity losses) incurred by it and has initiated the process of seeking reimbursements and claims from the aircraft manufacturer."
However, the airline is confident in the aircraft for the future, telling News 18 that it will not look to induct any other aircraft into its fleet going forwards. It is expecting a rapid delivery of more of the type once the grounding is lifted, and is anticipating having 25 737 MAX 8 at its disposal by early 2020.
A new Middle Eastern hub
The carrier is reportedly interested in setting up a new Middle Eastern hub and undertaking an aggressive expansion into the east of Europe. Efforts are already underway to set up this hub, which will be located in Ras Al Khaimah in the UAE. An MoU is already in place with the international airport there, and SpiceJet plans to start flights to the airport next month.
Singh told Gulf News that Ras Al Khaimah still has a lot of space for growth, which has one of the reasons it was chosen as the hub location. In December it plans to have four of five aircraft based at the hub, which will be deployed on medium haul flights of six to seven hours. Singh told Gulf News,
“This goes beyond trying to provide more connectivity to Ras Al Khaimah … or Europe; we think that there is great potential as well in the logistics space, using Ras Al Khaimah as a port of entry into the UAE and North Africa.”
Once the hub is up and running, SpiceJet will seek to launch an airline from there. It is already applying for the relevant certification to allow it to do so. It if is successful, it will become the sixth carrier based in the UAE.
What do you think? Should SpiceJet order more MAX aircraft? Does the UAE need another carrier? Let us know in the comments.