(Bloomberg) -- Jet Airways India Ltd., the country’s biggest full-service carrier, is in talks to buy 50 narrowbody jets worth at least $5.6 billion on top of a pending order for Boeing Co. 737 Max aircraft, a person with direct knowledge of the plan said.
The most likely model the airline is considering is the 737 Max, though it is also looking at Airbus SE’s A321neo jets as well as the 737 Max 10, a stretched version Boeing may introduce in Paris this month, the person said, asking not to be identified as the discussions are confidential. Jet Airways could sign the deal in the next two months for deliveries starting 2024, the person said.
Jet Airways continuously reviews its fleet in response to demand, but won’t comment on speculation, a spokesman said in an email. A representative for Boeing said in an email that the planemaker is in constant communications with airlines in India about their needs but doesn’t discuss specific conversations publicly. An Airbus spokesman declined to comment.
Shares of the carrier extended gains to as much as 3.2 percent and traded at 500.30 rupees as of 3:29 p.m. in Mumbai on Monday.
Jet Airways, in which Abu Dhabi’s Etihad Airways PJSC owns a 24 percent stake, is expanding its fleet as competition intensifies in India, one of the world’s fastest-growing aviation markets, where carriers offer cut-throat, below-cost fares to attract passengers. The Indian carrier made its first annual profit in seven years in the 12 months ended March 2016, mainly due to a drop in oil prices -- the biggest cost for an airline.
Airlines in Asia are ordering hundreds of new planes to meet surging demand as an emerging middle class spends more of its disposable income on air travel. In India, market leader IndiGo has ordered 430 A320neo jets and is in talks to buy 50 ATR turboprop aircraft, while budget carrier SpiceJet Ltd. has ordered as many as 205 Boeing jets.
The 737 Max is the fastest selling aircraft in Boeing’s history, with 3,700 orders from 87 customers from around the world, according to the Chicago-based company’s website.
In 2015, Boeing said Jet Airways had an order for 75 Max 8 variants due for delivery starting 2018. The current list price of the Max 8 is $112.4 million before customary discounts for large orders.
Jet Airways, which has 10 Boeing 787s on order, is also in talks with the planemaker to defer deliveries of the Dreamliners by two to three years, as the airline can use its existing relatively new 777 jets for a few more years, the person said. The carrier disclosed the 787 order in 2007 and has repeatedly delayed taking deliveries of the aircraft since 2011. In about three years, Jet’s A330s will exit its fleet, the person said.