SpiceJet buys 100 narrow-body planes: The future of air travel in India?
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On Friday, Indian airline SpiceJet announced that it would acquire 100 new 737 MAX airliners from Boeing, with an option to acquire 50 more of the same aircraft.
"What this aircraft order does is enhance our ability to be competitive in the future as it helps us reduce costs," the airline鈥檚 chairman, Ajay Singh, said in a news conference in New Delhi, as听.
In the airline industry, trying to reduce costs is nothing new. But India鈥檚 carriers have pursued this goal amid a surge in demand: The grew 37-fold between 1970 and 2015, when 99 million Indians flew. In this huge, fast-growing market, SpiceJet鈥檚 decision to buy the narrow-body 737 offers a glimpse at the future of commercial aviation.
In the 2000s, airlines and airplane manufacturers saw size as key. On Jan. 17, 2005, Airbus unveiled its double-decker 鈥渟uperjumbo鈥 A380 aircraft to much fanfare. 鈥,鈥 Noel Forgeard, then Airbus鈥檚 chief executive officer, confidently said at the time, according to the BBC.
Developing countries like India, whose growing middle classes could afford to fly for the first time, were expected to drive this demand.听Half a dozen airlines were started to serve India's "fast-growing and flush middle class" after the Indian government opened commercial aviation to increased competition, and "Passenger numbers surged as cheap flights proved an irresistible alternative to long, bumpy train journeys," as 海角大神 reported in 2009.听
These airlines hit turbulence during the 2008-2009 global recession. Eight years later, India鈥檚 air travel numbers are rising again. But few, if any, Indians are taking their first flights on an ultra-large jet. Ten years after the A380鈥檚 launch, 鈥 well below the 鈥700 or 750鈥 predicted by Mr. Forgeard 12 years ago.
The 737 MAX鈥檚 maximum seating of 200听can鈥檛 compete with the A380鈥檚 555 seating capacity 鈥 or can it? 听鈥渋ncreasingly crowded hubs and Asian economic expansion would spur demand for legions of superjumbos across the planet.... Boeing saw things differently, suggesting globalization would demand higher frequencies on trunk routes combined with a multiplicity of new services linking smaller cities,鈥 Bloomberg reported in July.
Boeing鈥檚 prediction has since borne out, and airlines like SpiceJet are doing most of their business on shorter planes. In 2016, flew internationally,听 on domestic routes.
Smaller planes make sense for these shorter routes. With more, smaller aircraft like the 737, an airline can re-deploy aircraft as needed to meet changing demands. SpiceJet already fills its planes .
SpiceJet鈥檚 new purchase makes it well-equipped to continue this strategy. It also pushes Boeing鈥檚 expectations on which planes could prove most profitable.听The Seattle-based aircraft giant believed that both trunk routes and flights between small cities like the 777 and the 787, as Bloomberg reported. But its newest customer, whose domestic routes connect some of the largest cities in the world, is thinking even smaller.