Jet Air to buy up to 100 new planes this year; Boeing, Airbus in race

12 Oct 2017

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Jet Airways is planning to add 75-100 new narrow body aircraft to its fleet for which orders will be placed by the end of March in order to expand its capacity in the world's fastest growing aviation market.

The new orders are in addition to the 75 aircraft ordered by the company in 2016, chief executive Vinay Dubey told reporters in Chennai.

"In 2016 we have placed an order for 75 Boeing 737 Max aircraft and within the course of next few months, between now and the end of the year, we will be finalising an order between 75-100 additional narrow-body aircraft. We are in the final stage of deciding on it," he said.

Speaking after announcing a new non-stop intercontinental flight from Chennai to Paris to commence on 29 October, he added, "We need to connect people with places and we think we can do it profitably with another 100 aircraft. It would be a combination of new routes and existing routes. Today we have about 90 narrow body aircraft and our view is that over the next five years, we are going to see Jet Airways' capacity grow in the neighbourhood of about 10 per cent CAGR."

"We are finalising on what exactly we want to order in terms of which type of aircraft, which manufacturer and others. Stay tuned we will put that up," he averred, refusing to comment on the investment required for the additional aircraft and how it would fund this,'' Dubey said.

While he did not go into details, according to Bloomberg, a person with direct knowledge of the plan said earlier that Jet Airways was in talks to buy 50 single-aisle jets - either the biggest version of Boeing Co's 737 Max or Airbus SE's A321neo.

The order would be valued at as much as $12.5 billion based on list prices for 100 Boeing 737 Max 10 jets, before discounts that are customary for large aircraft purchases.

Jet Airways - in which Abu Dhabi's Etihad Airways PJSC holds a minority stake - currently flies an all-Boeing narrow-body fleet and already has an order for the Max 8, the most popular of the planemaker's revamped 737 models.

The airline currently has a fleet of around 114 aircraft, of which a majority is a narrow-body aircraft. These aircraft have the ability to fly domestically and internationally. The company will continue to focus on both India as wells as the international destinations, Dubey added.

Commenting on the debt, he said that the company is looking at reducing the debt over time and it would be by "throwing out cash from operations". He said that there is no specific target on debt reduction plan he can share at present.

According to a report by Centre for Asia Pacific Aviation India Pvt Ltd in May this year, the addition of 100 narrow body aircraft by Jet Airways would take the total of narrow-body aircraft in its fleet to 175.

"Jet's existing order of 75 737 Max aircraft, which are scheduled for delivery between 2018 and 2023, will mostly be used for replacement. At present, half of its narrow-body fleet is aged 9 years or older," it said. The new order of 100 aircraft is intended for expansion. It also observes that a large wide-body order will be necessary for the near term, both for replacement and expansion.

Non-stop to Paris
The new non-stop flight from Chennai to Paris will complement the existing direct daily operations from Mumbai to Paris. Air France, KLM and Delta Air Lines will codeshare on the new flight, which will operate for five days every week, excluding Tuesday and Wednesday.

The new service also enhances Jet Airways' cargo capacity between Chennai and Paris by as much as 15 tons, enhancing trade in a variety of commodities.

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