March 12 (Bloomberg) -- Boeing Co. won an order for 42 of its 737 Max planes valued at about $4.4 billion from SpiceJet Ltd., an Indian budget carrier controlled by billionaire Kalanithi Maran.
SpiceJet, which has taken delivery of 31 Boeing planes so far, has another 59 on order including those announced today, the planemaker announced in a statement today at the air show being held in Hyderabad, in south India. The value of the order is based on list prices. Airlines typically get discounts.
Today’s order will keep SpiceJet as a Boeing customer after the airline said last year it was considering switching to Airbus Group NV planes. The fleets of India’s discount airlines already are tilted toward Airbus, whose jets are used by IndiGo, the country’s biggest domestic carrier by market share, and Go Airlines (India) Pvt.
SpiceJet rose as much as 7.5 percent, poised for the biggest increase since December 2013. The shares changed hands at 14.92 rupees, up 5.5 percent, as of 12:50 p.m. in Mumbai.
Deliveries of the aircraft will start in 2018, S.L. Narayanan, Chief Financial Officer of Sun Group, controlled by Maran, said at a press conference in Hyderabad today.
Maran’s 75 percent stake in Sun TV Network Ltd. combined with his 24.24 percent ownership of SpiceJet are valued at more than $2 billion, according to data compiled by Bloomberg.
The Max is an upgraded version of the single-aisle 737, the world’s most widely flown jetliner, and will feature new, more-efficient engines. It’s offered in three versions, the Max 7, 8 and 9, with prices ranging from $85.1 million to $109.9 million. SpiceJet ordered the Max 8, according to the Boeing statement.
Deliveries in 2017
Development of the 737 Max is on schedule with firm configuration of the airplane achieved in July, Boeing said in the statement today. The first flight is scheduled in 2016 with deliveries to customers starting the year after. The Max has more than 1,800 orders, the planemaker said.
Buying new planes will help SpiceJet take on market leader IndiGo and impending competition from AirAsia Bhd. and Singapore Airlines Ltd., both of which have sought licenses to start local airlines in India.
Economic growth across the Asia-Pacific region in the past decade has spurred a travel boom that Boeing and Airbus are counting on to drive jetliner demand. India’s commercial airline fleet will more than double to 1,000 planes by 2020, from 400 now, India’s Aviation Minister Ajit Singh said in Hyderabad today.
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