New Delhi: India’s Jet Airways Ltd has entered into an agreement to buy 75 Boeing Co 737 MAX narrowbody jets, worth $8.8 billion (Dh32.3 billion), to meet passenger demand which has shown no sign of abating after years of growth.
Jet Airways, in a filing to the stock exchange late on Tuesday, did not say whether the agreement was a formal order or a non-binding memorandum of understanding.
Boeing did not respond to a request for comment.
The jets would be worth $8.8 billion at list prices, though airlines typically receive significant discounts from manufacturers.
Shares of Jet Airways rose as much as 3.2 per cent in Wednesday morning trade, and were trading up 1.4 per cent at 0610 GMT. The wider Mumbai market was up 0.25 per cent.
The latest agreement comes as Indian airlines rush to expand fleets to meet ever-increasing demand for domestic as well as international flights, making it one of the most targeted sales markets for Boeing and European rival Airbus SE.
Boeing said in July it expected Indian airlines to order up to 2,100 aircraft worth $290 billion over the next 20 years, calling it the highest-ever forecast for Asia’s third-largest economy.
Domestic passenger traffic increased 17.9 per cent in January from a year earlier for the 41st consecutive month of double-digit growth, showed data from the International Air Transport Association.
Jet Airways Chief Executive Vinay Dube last month told reporters the airline was hoping to close the latest deal by the end of March.
The airline finalised a separate deal to buy 75 other Boeing 737 MAX aircraft last year.
Factbox: Boeing hit by US-China tariff war in boost to Airbus aircraft
China slapped a 25 per cent levy on US aircraft in a retaliatory move, placing Boeing Co. at a disadvantage against its key competitor Airbus SE in the best-selling single-aisle segment. In a tit-for-tat response to tariffs by President Donald Trump, China announced the levy on planes weighing between 15,000 kilograms (33,070 pounds) and 45,000 kilograms, which would include some variants of its 737 family of passenger jets. Single-aisle jets, dominated by Boeing’s 737 and Airbus A320 series, are likely to account for 75 per cent of the global market in 20 years, according to Boeing’s estimates.
China, poised to surpass the US as the world’s biggest market for planes by as early as 2022, is crucial for the Chicago-based plane maker. More than 50 per cent of the commercial jetliners operating in China are Boeing aeroplanes, with more than a quarter of its global delivery last year to the Asian giant. Boeing fell as much as 5.1 per cent to $314.10 in early New York trading ahead of the US market open. The shares, which closed Tuesday at $330.82, are up 12 per cent this year. Boeing and Airbus declined to comment on China’s decision.
— Bloomberg
