SpiceJet is in talks to buy 5 Boeing planes for $350 million

SpiceJet Ltd., a 3-month-old low-fare carrier in India, is negotiating with Boeing Co. to buy five planes valued at $350 million to expand its fleet and tap the growing number of people wanting to fly in India.

SpiceJet is in talks to buy five of Boeing's 737-900ER aircraft, said Dinesh Keskar, a Boeing vice president. New Delhi-based SpiceJet is also discussing an option for five more planes, Keskar said in a phone interview Sept. 2.

Adding the 737-900ER to its fleet would allow SpiceJet to carry more passengers on its most popular routes. The airline currently only uses the smaller 737-800 aircraft. Indian carriers are buying and leasing more aircraft as rising incomes and economic growth allow more people to opt for plane travel.

"Travel demand in India is so strong that everyone needs more planes," said Keskar. "With jet fuel prices soaring every day, any chance to help cut costs will be most welcome for airlines and the 737-900ER plane carries more people."

SpiceJet, which began flights in May with fares as low as 99 rupees ($2.3), in February ordered 10 Boeing 737-800 aircraft valued at $630 million based on list prices. In June the airline said it plans to convert an option to buy 10 more into firm orders because it was filing more than 95 percent of seats.

The airline, which counts Citigroup Inc., Goldman Sachs Group Inc. and ABN Amro Holding NV as its investors, flies 189 people in an all-economy configuration in its 737-800 aircraft. The 737-900ER could carry as many as 212 people, Keskar said.

Shares of SpiceJet rose 8.2 percent to 110.25 rupees in Mumbai on Sept. 2. The stock has more than tripled this year after quadrupling last year and doubling the year before.