SpiceJet re-negotiating Boeing deal

July 26th, 2008 - 7:51 pm ICT by IANS  

New Delhi, July 26 (IANS) Faced with huge losses owing to a slowdown in passenger traffic and higher fuel and operating costs, the Delhi-based low cost air carrier SpiceJet Saturday said it was re-negotiating its deal with Boeing. “We are re-negotiating our deal with Boeing now. We prefer sub-leasing aircraft either through wet sub-lease or dry sub-lease,” Samyukta Sridharan, a senior executive officer of SpiceJet, told IANS. Wet sub-lease comes with pilot and crew while in case of dry sub-lease, it is only the aircraft.

This move to step back from earlier decision to buy aircraft from Boeing comes despite the US billionaire investor W.L. Ross infused Rs.34.5 billion ($821.4 million) in the airline July 16 this month. SpiceJet is understood to have delayed the purchase of seven of the 30 aircraft it ordered in 2005.

The airline is currently operating 14 planes, delivered between 2005 and 2007. SpiceJet’s load factor last month was 78 percent against 90 percent in June last year.

Earlier this week, Boeing senior vice-president Dinesh Keskar here ruled out any Indian carrier deferring on deliveries of new aircraft. SpiceJet had ordered all its aircraft from the Boeing.

According to airline sources, a few other Indian low-cost airlines also plan to cancel or cut deliveries of new aircraft or to sub-lease them.

However, scheduled carriers like Air India and Jet Airways are expected to take deliveries of its new aircraft as scheduled.

But the Vijay Mallya-promoted Kingfisher Airlines has reportedly deferred plans to buy 29 narrow-bodied A320s, which it committed to purchase from Airbus last year.

The company is in talks with international carriers to sell two of the five A340-500 aircraft it had committed to buy from Airbus last year. The airline may also defer taking deliveries of 29 narrow-bodied A320s, airline sources said.

Kingfisher spokespersons were not available for comment. The airline has about 20 deliveries scheduled every year till 2012, but schedules would be revised.

Kingfisher currently has 84 aircraft, next only to the fleet strength of the Naresh Goyal-promoted Jet Airways, which has 87 aircraft.

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