New Delhi: Naresh Goyal-promoted Jet Airways has cancelled an order for 17 mid-range Boeing 737s, which it had placed in January 2012, owing to financing problems, according to sources in the know.
Sources said that Jet Airways, India’s second largest airline by passengers carried, cancelled the order a couple of days ago when the aircraft manufacturer asked it to make pre-delivery payments (PDP) for executing the order.
According to prevalent market practice, airlines are not required to deposit any money at the time of placement of order but are required to make PDP of around 15 per cent of the deal value prior to the manufacturer executing the order.
The Boeing website lists the price of a Boeing 737-800 aircraft at $90.5 million. At this, the deal would have been worth around $1.5 billion.
Interestingly, the cancellation of the order comes after Jet Airways inked a purchase agreement to buy 50 Boeing 737 MAX in August last year. While Jet is yet to make an official announcement of this order, budget carrier SpiceJet - which placed a similar order for 42 Boeing 737-8 MAX for $4. 4 billion at the air show in Hyderabad in March this year - has announced its order.
16/04/14 Sharmistha Mukherjee/Business Standard
To Read the News in full at Source, Click the Headline
Sources said that Jet Airways, India’s second largest airline by passengers carried, cancelled the order a couple of days ago when the aircraft manufacturer asked it to make pre-delivery payments (PDP) for executing the order.
According to prevalent market practice, airlines are not required to deposit any money at the time of placement of order but are required to make PDP of around 15 per cent of the deal value prior to the manufacturer executing the order.
The Boeing website lists the price of a Boeing 737-800 aircraft at $90.5 million. At this, the deal would have been worth around $1.5 billion.
Interestingly, the cancellation of the order comes after Jet Airways inked a purchase agreement to buy 50 Boeing 737 MAX in August last year. While Jet is yet to make an official announcement of this order, budget carrier SpiceJet - which placed a similar order for 42 Boeing 737-8 MAX for $4. 4 billion at the air show in Hyderabad in March this year - has announced its order.
16/04/14 Sharmistha Mukherjee/Business Standard
