Jet Airways signs $550 mil deal with Boeing.
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Jet Airways signs $550m deal for 10 Boeing 737s
Cuckoo Paul
Le Bourget 14 June
JET Airways today signed a purchase agreement with Boeing Commercial Aircraft group for 10 more next generation 737 aircraft. The deal, worth $550m, was signed by Jet Airways chairman Naresh Goyal, who is on a high-profile visit to witness the Paris air-show. Importantly, the aircraft, which are to be delivered between 2001 and 2003, will replace the existing leased aircraft. Jet Airways is expected to float an international tender for the funding of the fleet.
''Tying up funds for the aircraft will not be a problem because the US Exim has agreed to guarantee the deal,'' Mr Goyal told The Economic Times. The asset-based financing for the aircraft will be underwritten by a consortium of banks. The US Exim guarantee is for 85 per cent of the fleet cost. The special 'substitution right' deal with Boeing will allow Jet to choose between the 737 versions 600/700/800/900.
Boeing has offered Jet Airways the flexibility of choosing the exact size of the aircraft as the delivery time draws closer, depending on the market conditions at the time. The 600/700/800 and 900 versions are differing sizes of the fuselage of same aircraft type.
''The 737-900, which will enter production only by the end of 2000, is a 180-seater in a two-class configuration,'' said Boeing India president, Dinesh Keskar.
The new deal takes Jet Airways miles ahead of its domestic competition in terms of the aircraft type. Jet Airways, in fact, already ranks among the best in the world, in terms of average fleet age. The new order for the latest aircraft available is expected to consolidate their position further, according to international experts here.
Boeing is currently in the middle of delivering its existing order of 10 aircraft to Jet. Six of the aircraft, 737-400 and 800s have already been delivered and four more are expected to join the fleet by the end of this financial year. The airline, which currently has a fleet of 25 aircraft, has government clearance for 20 and has applied for four more aircraft.
Meanwhile, at the Paris air-show, Jet Airways announced the leasing of five ATR-72 aircraft on Sunday. The aircraft will be used on short-haul feeder routes. The brand-new aircraft will be taken on an operating lease from Aircraft International Renting (AIR), a subsidiary of France's TAT group and Credit Agricole IndoSuez.
Commenting on the airline's profitability in 1998-99, Mr Goyal said that Jet Airways had an average load factor of 67 per cent during the year.
The market share grew from about 28 to 35 per cent, he said. On profit figures, Mr Goyal said: ''We make enough money.'' Commenting on the possibility of going public to fund expansion plans, he said there was ''no need for it now.
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