Boeing announced on Tuesday it would suspend producing 737 Max planes as the certification process of the safety of these planes by the Federal Aviation Administration would move into 2020.
Boeing said that halting production would help it deliver stored aircrafts and its decision to suspend 737 Max production was determined by “uncertainty about the timing and conditions of return to service and global training approvals.” The 737 MAX’s have been grounded by aviation authorities across the globe after two fatal crashes in October 2018 and March 2019 in Indonesia and Eithopia respectively killed 346 people on board.
Boeing’s decision to halt 737 MAX production could impact India’s aviation sector in many ways. The first discernible impact would be on Ajay Singh-controlled Spicejet, India’s second biggest airline in terms of market share. In the end of 2016, Spicejet had firmed up orders for 205 new planes from Boeing with 155 of them being 737 MAXs. The airline has 13 of these planes --all of them grounded. Spicejet’s orders with Boeing for its planes were estimated to be at least $22 billion. In effect, Spicejet is able to operate only 104 planes of its 117 strong fleet. Despite troubles with the 737 MAX groundings, Spicejet still expanded its fleet by 37 planes since during 2019-20 as it sought to capture the market void left by Jet Airways closure. Boeing’s decision to suspend production could trouble Spicejet’s aggressive fleet expansion plans. While Spicejet’s Singh has recently said that his company would place orders for 100 planes from Airbus, there seems to have been little progress on finalising a deal with the European plane maker.
If Spicejet decides to go ahead with a mega-deal with Airbus to substitute for the 737 MAX deal, it could push Boeing further to the margins in India’s aviation sector. Of the 696 odd planes of various manufacturers in operation in India, only 187 of them are Boeings.
This includes the 14 Boeings operated by the Indian Air Force. Airbus, in comparison, has over 400 planes in Indian skies – accounting for two-thirds of all operational aircraft in the country. Airbus order books are booming in India despite problems with the Pratt and Whitney engines on its A320 Neo aircraft.
In October, Indigo announced that it would buy 300 more A320 Neos taking its total fleet strength of such aircraft to 730. India’s aviation regulator Diorector General of Civil Aviation (DGCA) has ordered Indigo and Go Air which operate these aircraft with Pratt and Whitney engines to replace then with either updated engines of the same manufacturer or with engines of other manufacturers. To cut its troubles short, Indigo decided earlier this year that it would be using engines manufactured by CFM International, a joint venture between France based Safran SA and US based General Electric. Similarly GoAir reportedly has 144 A320 Neos on order.
Spicejet was the biggest operator of Boeing planes in India – with all of its narrow bodied fleet comprised of Boeing planes. Air India, the second biggest operator of Boeing planes, has put any fleet acquisition plans on hold with the impending disinvestment of India’s national carrier. With Boeing’s decision to suspend production and most new orders from India going to Airbus, American made planes could well be a rare sight in India’s skies.