SpiceJet’s $12.5 Billion Deal with Safran for Aircraft Engines

Issue: 3 / 2018

On March 10 this year, no-frills airline SpiceJet inked a $12.5 billion (81,000 crore) deal with the Safran Group of France for CFM aircraft engines. CFM engines are manufactured by CFM International, a joint venture between Safran and General Electric. The deal that is one of the biggest in the aviation sector, was inked at the Indo-French Economic Partnership signing ceremony in Delhi on the occasion of the visit to India by Emmanuel Macron, the President of France. SpiceJet and Safran Group have now finalised the purchase of LEAP-1B engines to power a total of 155 Boeing 737 MAX planes, along with spare engines to support the fleet. The airline has also signed a ten-year Rate per Flight Hour (RPFH) agreement with CFM Services that covers all LEAP-1B engines powering SpiceJet’s 737 MAX planes. Currently, SpiceJet operates a fleet of more than 38 CFM 56-7B-powered Boeing 737 NG family of aircraft. Under the terms of the agreement, CFM guarantees maintenance costs for all SpiceJet’s LEAP-1B engines on a pay-by-hour basis, the release issued by the airline said. “We hope they provide us unmatched service reliability while keeping our costs in check to ensure profitable operations,” SpiceJet CMD Ajay Singh said. Safran CEO Philippe Petitcolin has said that it has been exciting to watch this airline grow over the years and believes it has a very bright future.”We are proud to be such a big part of the SpiceJet team over the long term,” he added.