SpiceJet to buy 10 Boeings for $700mn

Delhi-based budget carrier SpiceJet will acquire 10 new Boeing 737 airplanes as a part of its fleet expansion programme. It will spend between $650 million and $700 million for the purpose. The airline would begin taking delivery of the airplanes from the 2008-end and complete the same by 2011.

This low-fare airline would have 35 airplanes in its fleet by the end of 2011. SpiceJet currently operates in 14 cities, including Mumbai, Delhi, Kolkata, Chennai, Hyderabad and Bangalore, with 10 Boeing 737-800 aircraft.

"Boeing 737 can fly non-stop for five hours to West Asia and other closer destinations. However, we have no plans to fly overseas at present. We are not entitled to get rights as we have not yet completed five years of operations," said Siddhanta Sharma, managing director and CEO of SpiceJet, when asked about its overseas foray.

The board of directors of SpiceJet had approved the acquisition proposal, the company informed Bombay Stock Exchange (BSE).

Asked about funding the acquisition, Sharma said, "We can either buy or opt for sale and lease-back of these airplanes. We will take a call just before the delivery schedules." The airline had raised $70 million in January by selling stock to the Tata group, Goldman Sachs and BNP Paribas.

SpiceJet has posted a net loss of Rs 21.37 crore for the quarter ended February 28, 2007, compared with a net profit of Rs 4.30 crore for the corresponding period last year.

Backed by other income, the total income from operations grew 84 per cent at Rs 277.69 crore for the reporting quarter compared with Rs 150.74 crore for the quarter ended February 28, 2006.

The scrip of SpiceJet fell marginally on the BSE to Rs 44.55 today against the previous day's close of Rs 45.

SpiceJet competes with the country's largest budget carriers such as Air Deccan, GoAir and IndiGo.