Boeing And Airbus locked in SpiceJet battle
Indian airline revived after fighting for survival 2 years ago
- Spicejet are said to be interested in ordering as many as 100 airplanes
Updated : 11:30
Airplane manufacturers Boeing and Airbus are competing for a contract with revived Indian airline SpiceJet Ltd. for as many as 100 planes.
Two years ago the Indian firm were in trouble as creditors pulled away and oil companies were refusing to refuel its aircraft.
Now the two biggest planemakers in the world are grappling over their signature, according to Bloomberg sources. Both sides are offering "aggressive discounts" according to the sources.
Chicago-based Boeing is currently struggling to keep up with its competitor in the rapidly expanding Indian market, with Airbus supplying planes to IndiGo, Singapore Airlines and AirAsia.
The discount airline is looking to quickly increase its fleet in order to compete with IndiGo, as SpiceJet only has 43 planes in comparison with its rival's 108 jets.
“Airbus enjoys 70 percent market share in India and most Indian carriers are growing their business with us,” said Airbus spokesman Justin Dubon. “We’d be delighted to help SpiceJet too.”
Air travel in India grew by 20% last year
Plenty of deals for airplane manufacturers are currently on the cards due to this week's Farnborough International Airshow in the UK, with both Boeing and Airbus hoping to secure important contracts for future prospects.
A SpiceJet spokesman confirmed that chairman Ajay Singh is attending this week’s Farnborough Air Show in the U.K., but declined to say whether an order announcement is imminent.
Air travel in India grew by 20% last year as 8 carriers now traverse its skies, according to the International Air Transport Association.
However, air travel in India also comes with significant risks, with some carriers failing due to fuel taxes, tariffs and low fares. No fewer than 17 airlines in India have shut down in the past two decades.
Accumulated losses of operating airlines have reached 600 billion rupees ($8.9 billion), according to a research paper published in June by consulting company KPMG and the Associated Chambers of Commerce of India.