One of the leading airlines in India, Jet Airways Ltd has entered a new agreement to buy 75 Boeing Co 737 MAX narrow-body jets worth $8.8 billion to meet passenger demand in the world’s fastest-growing major aviation market.
As of December 2017, the company had 116 operating fleet that included a mix of turbo-prop ATRs, narrow-body Boeing 737s, wide-body Airbus A330s and Boeing 777s. In an earnings conference call earlier, the Mumbai-headquartered airline had indicated that it plans to add 25 planes to its fleet by 2020.
Media report suggests that the deal for 75-plane could be valued at over $8.7bn.
The company has a market share of 17.2 percent and a capacity share of 17.8 in the country.
Jet Airways is expected to face pressure in its operational-margins due to lower yields. It is due to a higher competition in the domestic market. The company is now trading at Rs 628.50, i.e., up by 2.39 percent from its earlier close of Rs 613.85 on the Bombay Stock Exchange.
Boeing said in July it expected Indian airlines to order up to 2100 aircraft worth $290 billion over the next two years, calling it the highest-ever forecast for Asia’s third-largest economy.
The domestic passenger traffic increased by 17.9% in January in year-on-year basis and the company reported double-digit growth for the 41st consecutive month, a data from the International Air Transport Association showed.
Vinay Dube, Chief Executive, Jet Airways had told the reporters last month that the airline was hoping to close the deal by the end of March.
The Airways had recently signed an ‘Enhanced Cooperation Agreement’ with France-KLM, wherein customers will benefit from multiple travel options in a network spanning 106 destination in Europe and 44 cities in India.