Jet Airways orders 75 Boeing 737 Max planes

Jet Airways on Monday announced an order for 75 Boeing 737 Max aircraft as a part of its fleet replacement strategy.

Jet's order, which includes options for 50 additional planes of the type, is valued at $8 billion and its largest.

Other domestic airlines IndiGo, GoAir and SpiceJet have booked fuel-efficient aircraft like the Boeing 737 Max or the Airbus A320Neo. This deal ensures Jet does not lose on cost competitiveness.

Jet's deal was announced at the Dubai air show on Monday, but a portion of the order was finalised two years ago. The order for 50 of the 737 Max planes was finalised in 2013. Later, Jet decided to swap the order for 25 current generation Boeing 737s with a similar number of 737 Max planes. While Boeing had booked the Jet order earlier, it was attributed to an unidentified customer.

The new aircraft would support Jet's replacement strategy and ensure it maintains a modern, environment-friendly fleet, the airline said. It added the transaction would be financed and managed through a sale and leaseback arrangement, with deliveries commencing in 2018. Jet has a fleet of 115 aircraft, which includes 68 Boeing 737s that are deployed on its domestic network and on routes to the Persian Gulf and Southeast Asia. Almost all its 737s are on operating leases.

"This order is an endorsement of our confidence in the long-term prospects of the Indian aviation sector, which reflects the positive forecast for the economy," Jet Airways Chairperson Naresh Goyal said.

"Boeing is proud that Jet Airways will be the first airline in India to take delivery of the 737 Max," said Ray Conner, president and chief executive officer, commercial airplanes, Boeing.

The single-aisle aircraft uses 20 per cent less fuel than the current 737s and has the lowest operating costs in the class, eight per cent per seat less than its nearest competitor, according to Boeing.

"Jet's order was critical because its narrow body fleet will need replacement over the next five years. We see this order mostly for replacement, but it is a positive statement about Jet's future direction," said Kapil Kaul, chief executive officer, South Asia, Centre for Asia Pacific Aviation.

"Every other airline in the market has an order book for its growth and finally Jet has also announced its order. Delivery starts in 2018, which means IndiGo and GoAir will be ahead of the curve in terms of technology and costs. But, it is a good beginning and soon Jet will need to consider ordering more planes to remain relevant in the domestic market," said K G Vishwanath, founder partner of Trinity Aviation Consultants, Singapore.