Boeing Co won an order for 150 Max jets from India’s newest airline, in a rare spot of good news for the US planemaker since a piece of fuselage blew off an Alaska Airlines flight almost two weeks ago.
Akasa Air, which began flying commercially less than two years ago, made a firm purchase for the 737 Max 10 and Max 8-200 planes to be delivered through 2032, the carrier announced at the Wings India air show. The order doesn’t include the Max 9 variant involved in the January 5 Alaska Airlines incident, when a door plug panel blew off shortly after takeoff.
Boeing shares rose as much as 2.3% in premarket New York trading after the announcement. The stock had slumped 22% this year on concern that increased regulatory scrutiny could slow plane deliveries.
Akasa’s total order book now stands at 226 aircraft, bolstering its domestic and international expansion plans, according to the statement. The airline, which currently operates a fleet of 22 Max jets, will “continue to rely primarily on sale and leaseback financing” for its new order, Chief Financial Officer Ankur Goel said.
The Alaska Air near-disaster has sparked a crisis of confidence in Boeing. While no one died, and the plane returned safely, the incident has renewed focus on the manufacturing giant’s safety record and quality control. The Federal Aviation Administration grounded most Max 9 jets following the incident, a measure it intends to keep in place until extensive inspections are completed.
The Akasa Air deal adds to a wave of orders from Indian carriers last year, betting on the surge in air travel demand from the country’s growing middle-class as budget airlines offer cheap ticket prices.
IndiGo, India’s biggest airline, and Air India Ltd have placed record deals for more than 900 aircraft with Boeing and Airbus SE.
While none of the Indian airlines operate the same type of jet involved in the Alaska Air incident, passengers on social media have been wary of flying any variant of the 737 Max, including Akasa’s.
The 737 Max are linked to some of the worst aircraft safety and design failures in recent aviation history, including the fatal Lion Air and Ethiopian Airlines crashes that killed 346 people.
Akasa said it completed a “thorough inspection” of its entire operational fleet of 737 Max aircraft and there were no “adverse findings.”
Akasa is up against IndiGo and Air India, which control almost three-quarters of India’s fiercely competitive aviation market. The airline, which has a 4.4% market share, has faced challenges along the way — it was forced to cut its schedule after rivals poached some of its pilots last year, and the death of its billionaire investor Rakesh Jhunjhunwala in 2022 sparked concerns about the company’s financial health.
The airline said the Boeing deal is a proof of its “solid financial foundation.”
Other recent deals for the same type of aircraft have indicated a list price of around $133 million for the Max 10 and about $100 million for the Max 8-200, which taking an average would mean Akasa’s order could be worth as much as $17.5 billion. Carriers typically get significant discounts on the list price however.
Akasa currently flies to 18 cities across India, including the busiest Mumbai-New Delhi route, and plans to expand its network to the Middle East and Southeast Asia.