SpiceJet's fleet expansion dreams hit as Boeing likely to delay 737 MAX aircraft deliveries amid suspension of production

  • On Monday, Boeing said it would suspend production of its best-selling 737 MAX jetliner in January, its biggest assembly-line halt in more than 20 years

  • As part of the fleet expansion, SpiceJet had ordered 205 Boeing 737 MAX aircraft in 2017, of which 13 have been delivered

  • In August this year, SpiceJet had posted its biggest-ever quarterly profit of Rs 261.7 crore, as it flew more passengers and raised fares in the wake of the collapse of Jet Airways

Budget carrier SpiceJet's capacity addition plans may be affected and the development is expected to affect it financially too as Boeing reportedly suspended the production of 737 Max aircraft that the airline had ordered, said a news report.

On Monday, Boeing said it would suspend production of its best-selling 737 MAX jetliner in January, its biggest assembly-line halt in more than 20 years, as fallout from two fatal crashes of the now-grounded aircraft drags into 2020, reported Reuters.

 SpiceJets fleet expansion dreams hit as Boeing likely to delay 737 MAX aircraft deliveries amid suspension of production

Representational image. Reuters

The decision at a two-day board meeting came after the Federal Aviation Administration (FAA) refused to approve the jet’s return to service before 2020 and delivered what was seen fas a public rebuff to Boeing’s hopes of moving faster.

As part of the fleet expansion, SpiceJet had ordered 205 Boeing 737 MAX aircraft in 2017, of which 13 have been delivered, said a report in Mint.

"The development does not bode well as continuous delays have impacted and will continue to impact SpiceJet. The delays have impacted the airline’s business strategically and financially," Kapil Kaul, CEO for India and the Middle East at aviation intelligence firm CAPA was quoted as saying in the report.

Boeing was doing its best regarding production and certification of the Max aircraft, airplane maker's India spokesperson was quoted as saying in the report.

The 737 MAX has been grounded since March after two crashes in Indonesia and Ethiopia killed 346 people within five months, costing the plane manufacturer more than $9 billion so far.

In March this year, SpiceJet had suspended the operations of Boeing 737 MAX aircraft model after the Directorate General of Civil Aviation's (DGCA) decision to ground all the aircraft model in the wake of the crashes.

SpiceJet has as many as 12 such aircraft in its fleet.

In August this year, SpiceJet had posted its biggest-ever quarterly profit of Rs 261.7 crore, as it flew more passengers and raised fares in the wake of the collapse of Jet Airways.

The carrier had a net loss of Rs 38.1 crore in the year-ago period.

However, in the September quarter, the low-cost carrier reported widening of loss to Rs 462.6 crore, mainly hit by expenses related to grounding of Boeing 737 MAX planes and changes in accounting norms.

In the year-ago period, the airline's loss stood at Rs 389.4 crore.

SpiceJet had said that it would introduce six new flights to expand its network across domestic and international routes in September.

All the new flights introduced would operate daily and are effective from 25 September to 26 October in the summer schedule and then from 5 November onwards.

With inputs from agencies

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Updated Date: Dec 17, 2019 16:58:12 IST