At a time, when fuel prices are skyrocketing, and a number of air carriers are in the red due to the rising costs of their operations, a private airline in India has come up in flying colours and ordering 75 more Boeing Jets for its fleet.
Jet Airways will buy these 75 Boeing 737 MAX Jets for over $9 Billion and the ultimate Jet Airways deal could be worth $9.7 billion.
Jet Airways has revealed that the agreement with Boeing to buy its 737 MAX aircraft, can be looked in the contexts of its expansion plans to cope up with the domestic passenger demand.
The Airline said that in a regulatory filing it had already tied up an agreement to buy these aircraft.
This is said to be the third agreement the Jet Airways has inked. This will apply to purchase of Boeing’s 737 MAX narrow-body jets in the last one year. It is expected to take the total to 225 aircraft. The airline has signed the orders for 75 planes each in October and April.
If we look at Boeing’s list prices, the deal of Jet Airways could be worth about $9.7 billion depending on the versions of 737 MAX the airline chooses. It is an open secret that airlines usually get a whopping discount from manufacturers by bringing costs below list prices.
The 737 MAX is suitable to seat between 130 to 230 passengers.
The agreement is seen in the context of airlines in India rushing to expand fleets to meet rush for local and global air traffic. It makes a profit to either Boeing or European rival Airbus company.
Boeing, on the other hand, has explained that in July 2017, it expected Indian airlines will order about 2,100 aircraft over the next 20 years.
It may be recalled that inland passenger traffic in India is growing at 20 per cent annually. Air traffic congestion at some airports such as Delhi and Mumbai do not allow much scope of the expansion though.