Sunday, November 7, 2010

SpiceJet To Buy 15 Q400s, Places 15 Options

Aviation Daily Nov 05 , 2010 , p. 08

Neelam Mathews

India’s budget carrier SpiceJet has placed an order worth $450 million at list price for 15 Bombardier Q400s, plus 15 options.

Deliveries start in the second quarter of 2011, with all deliveries to be completed within 12 months, Chief Commercial Officer Sam Sridharan told AVIATION WEEK.

On Nov. 2, the carrier reported a return to profit of $2.5 million for the quarter ending in September 2010, versus a loss of $22 million for the same quarter last year. “The decision to buy the Q400s has been based on the markets we are looking at where we would like to fly,” says Sridharan. The aircraft was chosen on the basis of the support in training and setting up offered by Bombardier, he added.

A growing appetite among Indian carriers to serve regional routes makes the country a potentially big market for 250 regional jets with a capacity of up to 120 seats, Brazilian aircraft manufacturer Embraer told AVIATION WEEK. SpiceJet was said to have been in talks for the Embraer 170.

“We believe requirements of the Tier 2 and 3 cities (all cities except major metros) have not been met. With regional jets we can offer more frequencies as against narrowbodies. We believe firmly in growth. We average 13 flights per week on every route we fly,” says Sridharan.

With the Indian economy growing fast, daily air service to secondary cities needs to be more frequent. SpiceJet plans initially to use the Q400s on grossly underused low- to medium-density routes—about 250 routes remain unused—as they are not profitable to run with narrowbody aircraft. In the non-metro sector, 133 routes have fewer than one frequency a day, a report by Embraer notes. Currently, of some 400 aircraft in scheduled commercial operations in India, 261 are narrowbodies and only 20 are regional jets. The airline recently placed an order for 30 Boeing 737-800s, with deliveries slated to start in mid-2014.

Sridharan said, “If the opportunity arises,” SpiceJet would look at flying the Q400s to neighboring international destinations.

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