Why Donald Trump thanked SpiceJet

NEW DELHI: US President Donald Trump on Monday thanked Gurgaon-based budget carrier SpiceJet for placing a large order for aircraft from American multinational Boeing. The order would create thousands of jobs in the US, Trump said. Prime Minister Narendra Modi met President Trump and First Lady Melania Trump at the White House in Washington DC on Monday, where the US President praised PM Modi for his efforts back home, saying he’s doing a “great job”."Economically, India is doing very well," Trump said.
SpiceJet has placed a $22 billion order with Boeing for up to 205 planes to be manufactured in the US. This would create 1,32,000 high-skilled, high-paid American jobs within the US, according to the US Department of Commerce.
Interestingly, Trump’s Commerce Secretary Wilbur Ross’s private equity firm Wilbur Ross and Co. had invested $86 million in SpiceJet in 2008. However, in 2010, Ross sold his 30 per cent stake in SpiceJet for $127 million.
On how SpiceJet plans to finance the aircraft order, the company’s chairman and managing director Ajay Singh said, “Funding arrangements for those are coming very quickly in place. We have already funded significant number of those aircraft through a sale and leaseback mechanism. And we have several offers.”
India was the fastest growing aviation market in the world last year, toppled recently from the top spot by China. In March, China’s passenger traffic in the domestic aviation market grew by 15.1 per cent on year, compared to India’s 14.6 per cent growth, according to data from the International Air Transport Association (IATA), the global airline industry’s trade association. Planemakers like Boeing look at India as a crucial market given its increasing demand and growth numbers.
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SpiceJet, which was on the verge of shutdown about a couple of years back, incredibly turned around its fate after the original promoter of the company Ajay Singh came back and took charge in January 2015, steering the company out of troubled waters.
“For the last 25 months in a row, we have had a load factor in excess of 92 per cent and that is something of a global record. This is combined with the fact that we have had the best on-time performance in FY17, we have now had nine profitable quarters and we have had amongst the least cancellations in the industry,” Singh said.
The SpiceJet stock is up 124 per cent in the current calendar year and has gained more than 800 per cent since the airline nearly shut shop in December 2014. It currently has a market value of $1.2 billion.
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