Indian airline SpiceJet has confirmed it has placed a massive order for new planes from Boeing, with 42 of the manufacturer's 737 MAX planes being purchased by the company.
However, stocks in Boeing slipped by around one per cent on the back of the news during yesterday's (March 11th) trading session on the New York Stock Exchange.
SpiceJet revealed that it will start to take delivery of the 737 MAX planes from 2017. The plane looks to be a big success for Boeing, which has already received a total of 1,800 orders for its latest model.
The share price of the Indian airline rose by seven per cent following the announcement as investors welcomed the news of the deal, which is believed to be worth about $4.4 billion (£2.7 billion) at list prices.
Boeing and Airbus are currently in a major battle, with the two major aeroplane manufacturers fighting for the same customers. As it stands, their share of the marketplace is fairly split, but the big order from SpiceJet could see the pendulum start to swing towards Boeing.
"The induction of Boeing 737 MAX will further modernise our fleet, improve customer experience, and ensure that we operate the most efficient fleet well into the future," said S.L. Narayanan, chief financial officer for the Sun Group, which owns SpiceJet. The Sun Group is one of the largest companies in India and also owns several television channels, as well as the airline.
SpiceJet has now ordered about 90 aircraft from Boeing in total and more than 30 of the planes have already been delivered to the Indian airline, enabling it to expand the range of locations it can fly passengers to
Dinesh Keskar, senior vice president of Asia Pacific and India sales for Boeing, stated that the order from SpiceJet is an endorsement in the company's ability to deliver high quality aircraft on time and to budget.
He said: "The capabilities of the 737 MAX supports SpiceJet's mission to become India's preferred low-cost airline. We are very proud to be partners with SpiceJet and a part of the airline's continued success with the addition of the 737 MAX."
Find up to date information on the FTSE 100 and spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.