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India's SpiceJet Hopes To Start Reuse Of Boeing 737 MAX Planes By Next Month

India's SpiceJet Hopes To Start Reuse Of Boeing 737 MAX Planes By Next Month
After a settlement agreement arrived at with lessor Avolon on leases of Boeing Co's grounded 737 MAX jets, India's SpiceJet Ltd nbow expects to get back the airplanes into its fleet and put them into service by the end of September, the airlines said.
After being grounded globally for almost two years after the plane was involved in two deadly crashes five months apart and questions were raised by the safety of the aircraft, flight clearance for the 737 Max planes have been given and about 175 countries have allowed the jets to return to service. Thirty airlines have already started using the planes in their services. The aircraft was banned from flying globally since March 2019.
However, restring of fight services using the 737 Ma x[lanes in Indian skies would require approval from the national regulators of the country, SpiceJet said.
There has so far not been any communication on this issue by the air safety regulator of India – the Directorate General of Civil Aviation. There were also no comments available from Avolon.
There were reports earlier this month that negotiations were being held between SpiceJet and aircraft lessors of MAX aircraft for a restructuring of the current lease agreements. While confirming the reports, no details were provided by the Indian airlines.
There has been an easing of pandemic induced restrictions in India along with the roll out of Covid-19 vaccines and analysts expect a pick up air traffic. Likhita Chepa, senior research analyst at CapitalVia Global Research said that considering the above situation, SpiceJet could be helped in its efforts to get its business back on track by its settlement to restart MAX aircraft.
"However, higher ATF (Air Turbine Fuel) prices might hurt margins and operability," Chepa added.
SpiceJet is the second largest airline in terms of market share and the only one to use the 737 Max planes in its fleet. The global grounding of the planes also included 13 of them used by SpiceJet and the company has previously stated that it had held talks with Boeing about compensation for costs and losses it has suffered.
The United States based plane maker reportedly told the media in India that it continues to work with global regulators to safely return the 737-8 and 737-9 to service. It however did not provide any comment on the compensation issue.
The ban on Boeing’s 737 Max planes, considered to be the company’s cash cow, was implemented after two deadly crashes within a span of just five months involving the planes in which a total of 346 people were killed. The US plane maker was pushed into a financial crisis which has since been compounded by the pandemic.
SpiceJet has fallen 24.4% this year, as of last close.

Christopher J. Mitchell

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