SpiceJet says India's US$85b plane orders still not enough

NEW DELHI: India’s airlines have ordered about 850 planes valued at about US$85bil in recent years. SpiceJet Ltd, a budget carrier, says that’s still not enough to meet demand.

SpiceJet, which last month ordered as many as 205 Boeing Co jets worth US$22bil, is being rather conservative with its purchases, the carrier’s chairman Ajay Singh told Rishaad Salamat in a Bloomberg Television interview in Singapore.

Demand would surge with more Indians starting to fly, fuelled by economic growth in smaller towns, he said.

“With all the orders that all the Indian airlines have placed, counting for replacements, we will have 800 planes in 10 years from now,” Singh said. “That’s not a lot of planes. That’s the same number of planes that Southwest Airlines has today.”

India – the world’s fastest growing major aviation market – is among battlegrounds in emerging markets for planemakers like Boeing and Airbus Group SE, as a rising middle class flies for the first time.

The potential has made Singapore Airlines Ltd and AirAsia Bhd set up local units that are grappling with poor infrastructure, cut-throat fare wars and taxes that make jet fuel the costliest in Asia.

“We have to keep on developing the infrastructure,” Singh said. “A lot of the growth in India is not happening in Mumbai and Delhi, it’s happening in tier-2, tier-3 towns.”

Indian Prime Minister Narendra Modi has offered to fund some of the airlines’ losses and to subsidise landing and parking charges if they fly to remote parts of the country as part of a recent policy.