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SpiceJet inducts first of 205 Boeing 737 Max planes, eyes destinations with lower tax

Updated : October 12, 2018 07:28 PM IST

After inducting the first Boeing 737 Max aircraft in its fleet, low cost carrier SpiceJet on Friday said it will fly to destinations and states that have lower value-added tax (VAT) on aviation turbine fuel (ATF).

Gurugram-based SpiceJet had ordered up to 205 Boeing 737 Max planes in January 2017 in a deal worth of Rs 1,50,000 crore.

In an interview to CNBC-TV18, Ajay Singh, chairman and chief executive officer, said fuel-efficient Boeing 737 Max planes are expected to bring down fuel costs of SpiceJet by about 14 percent and it's incredibly important when oil prices are going up.

Describing Boeing 737 Max as a green plane, Singh said, "This plane has far smaller noise footprint, about 40 percent smaller noise footprint. The nitrogen oxide (NOx) emissions are significantly lower, about 30-40 percent lower than the old plane."

"I think from an airlines perspective, it's a lower cost plane both in terms of fuel burn as well as in terms of engineering cost, which is about 25-30 percent lower for this aircraft,” he said.

According to Singh, airlines will hike fares during the festive season, "Today, the fares are absurdly low, sometimes it costs more to travel by taxi to the airport than it does to fly from one airport to the other."

“There are some players who are getting a lot of capacity in the market as they need to fill those planes. They try and sell cheap tickets and that keeps the fares depressed. I think there is a general sentiment in the industry that fares need to go up and I believe that it should happen really soon,” he further mentioned.
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