SpiceJet’s $12.5 Bn engine deal with CFM

A US$12.5 billion deal has been signed by low-fare airline SpiceJet and CFM International that finalises the purchase of LEAP-1B engines for the Indian carrier’s incoming fleet of 155 Boeing 737 MAX aircraft.

The agreement also covers spare engines to support the twin-engine fleet, as well as a 10-year Rate per Flight Hour (RPFH) agreement with CFM Services that covers all the engines powering SpiceJet’s MAX aircraft. Under the terms of the agreement, CFM guarantees maintenance costs for all the airline’s LEAP-1B engines on a pay-by-the-hour basis.

“We are looking forward to introducing the new LEAP-1B into our fleet,” said Ajay Singh, chairman and managing director at SpiceJet. “The CFM56 engines we currently operate have been a highly valued asset for us over the years. From what we have seen so far, the LEAP-1B is living up to its promises for efficiency and reliability. We hope they provide us unmatched service reliability while keeping our costs in check to ensure profitable operations.”

Philippe Petitcolin, CEO of CFM’s parent company Safran, added: “It has been exciting to watch this airline grow over the years and we believe it has a very bright future. We are proud to be such a big part of the SpiceJet team over the long term.” CFM is a joint venture between Safran and GE Aviation.

The deal was confirmed during French President Emmanuel Macron’s recent visit to India, where he met with Prime Minister, Narendra Modi.

SpiceJet currently operates a fleet of 38 CFM56-7B-powered next-generation B737 family aircraft, as well as 22 Bombardier Q400s, and operates more than 40 average daily flights to 52 destinations.

India is forecast to need 1,750 new passenger and cargo aircraft (valued at approximately $255 billion) over the next 20 years, with single-aisle aircraft representing the bulk of deliveries (1,320), according to Airbus. The country’s aircraft demand rate is almost twice the global average.

 

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