Boeing Nears SpiceJet Deal for 737 Max Planes to End Sales Lull
The Max, a global workhorse on shorter routes, has been idled since March in the wake of two deadly crashes.
(Bloomberg) -- Boeing Co. is in talks with Indian low-cost carrier SpiceJet Ltd. for a top-up order of 737 Max jetliners and could unveil a deal as soon as this week, marking a potential coup for the grounded narrow-body at the Dubai Airshow.
Despite turmoil in its home market, SpiceJet is seizing the chance to bolster its fleet of the narrow-body jets at a time when Boeing’s Max sales have been few and far between, following the grounding of the aircraft in March, Chairman Ajay Singh said in an interview with Bloomberg TV at the biennial event. The carrier plans to set up a new hub in the Middle East and expand to eastern Europe, he said.
While the size and timing of the order haven’t been set, Singh wouldn’t rule out an announcement at the ongoing trade expo. “That’s still under discussion,” he said. “But we will look to see what we can do.”
The Max, a single-aisle workhorse favored by budget carriers, has seen sales crippled by the crisis that enveloped Boeing following two deadly crashes that killed 346 people.
While Airbus SE on Monday touted two deals worth $30 billion, before customary discounts, Boeing gained 10 Max sales from Turkish carrier SunExpress valued at about $1.2 billion. Executives have focused public comments around getting the plane flying again while mending fences with airline customers and suppliers.
At the Paris air show in June, Boeing broke a sales drought with a blockbuster deal with British Airways owner IAG SA for 200 Max jets. That helped the U.S. planemaker counter an onslaught of orders for Airbus’s rival A320-series narrow-body, including the just-introduced long-distance version, the A321XLR.
Boeing shares fell less than 1% to $369.27 at 11:36 a.m. in New York. The stock has tumbled 13% since an Ethiopian Airlines plane plunged into a field March 10, the second fatal accident within a five-month span.
New Hub
Singh expects the Max to be recertified by the Federal Aviation Administration by the end of 2019, and said other regulators would soon follow the U.S., with commercial flights resuming worldwide in the first quarter of 2020. Bloomberg News reported earlier that SpiceJet was in talks with Boeing for Max jets.
“The technical fix is in place,” he said of Boeing’s revamped flight control software. “It’s the certification process they are going through at this time.”
SpiceJet is setting up a hub in Ras Al Khaimah in the United Arab Emirates to expand flights from India and connect with Eastern Europe, Singh said. He said long-term growth is intact in the Indian market, and the carrier will need more planes to support the traffic.
SpiceJet is an existing customer of Boeing for its single-aisle fleet. In January 2017, it notched its biggest-ever deal with an order for 100 Max jets, with options for 50 more planes.
--With assistance from Layan Odeh and Julie Johnsson.
To contact the reporters on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net;Siddharth Philip in Dubai at sphilip3@bloomberg.net;Yousef Gamal El-Din in Dubai at ygamaleldin@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Susan Warren
©2019 Bloomberg L.P.
