Boeing set to dent Airbus India dominance with 737 Max order

A Boeing 737 Max taxis after landing during a test flight in Seattle on Sept. 30, 2020. MUST CREDIT: Bloomberg photo by Chona Kasinger.

Boeing may win a crucial deal as early as this weekend for some 70 to 80 737 Max jets from an Indian startup airline, according to people familiar with the matter, denting Airbus SE’s dominance in what was until recently the world’s fastest-growing aviation market.

Akasa, a Mumbai-based carrier backed by billionaire investor Rakesh Jhunjhunwala, was earlier reported by Bloomberg News to be in talks with Boeing about the planes. A deal could be announced during the Dubai Airshow, which kicks off Nov. 14, some of the people said.

An agreement of that size to take the most popular variant of the 737 Max family — which most regulators have now approved to fly again following two deadly crashes — could be valued at as much as $10 billion at current list prices, although discounts are common in large orders.

Any transaction would allow Boeing to establish itself firmly in a market dominated by Airbus aircraft. Market leader IndiGo is the world’s largest customer for the European planemaker’s best-selling jets with orders for more than 700 planes, while the Indian affiliates of Singapore Airlines and AirAsia Group all use Airbus A320 models. Low-cost carrier SpiceJet is currently the only Indian customer for Boeing’s 737 Max jets, after Jet Airways India Ltd. collapsed due to debt issues in 2019.

Boeing shares jumped as much as 2.7% before the start of regular trading Thursday in New York. At 8:55 a.m., they were up 1.1% to $220.80 from Wednesday’s closing price.

Representatives for Boeing and Akasa declined to comment.

Akasa, operated by SNV Aviation, plans to offer flights across India starting in the summer of 2022 after it received initial approval from the country’s civil aviation ministry a month ago.

The airline has held discussions with Airbus, but Boeing jets could be delivered earlier, with the first batch of 10 coming in the first half of next year and the rest within three years, one of the people said. Akasa is still working out the finer details of its launch, including its brand identity, another person said.

Akasa is among a handful of airline startups cropping up across the globe, as tycoons and entrepreneurs take advantage of a slump in plane-lease rates after the pandemic slammed air travel and hundreds of jets were parked in deserts and airports.

The airline is also backed by Aditya Ghosh, a former head of IndiGo, and Vinay Dube, a Delta Air Lines veteran who also helped run Jet Airways.

 

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