Report: Boeing close to deal with India’s Jet Airways for 737MAX jets

Boeing Co. is in talks with India’s Jet Airways about the sale of 737 MAX jets, a Boeing executive said on Thursday, while two other people familiar with the matter said the company had secured the $5 billion deal.

Dinesh Keskar, senior vice president sales for Asia Pacific at Boeing, said he was also in discussion with state-owned Air India over sales of the MAX jets, but that these talks were not as “intensely involved” as they were with Jet.

The two other sources said the Jet deal for 50 planes had essentially been completed and the planes were already listed under Boeing’s “business with undisclosed customers,” in its order backlog.

The company announced a number of “undisclosed” orders in its last update for 2013. A formal announcement of the order is on hold as Jet wraps discussions over its fleet with Etihad, which last year bought a 24 percent stake in the Indian carrier, the people said.

Keskar declined further comment on the status of the deal.

Reuters first reported the negotiations with Jet in January.

Keskar said the 737 MAX planes are 14 percent more fuel efficient compared with its 737 planes, making them particularly attractive to Indian carriers hurt by high fuel costs.

Budget airline SpiceJet announced a deal with Boeing on Wednesday to buy 42 Boeing MAX jets in an order worth $4.4 billion.

“Yes, the Indian market right now is going through its difficulties. … Today everybody is selling below cost. And that means they are losing money,” Keskar said in an interview on the sidelines of the Hyderabad airshow.

“I think India will come out of it. We do see some improvements that are coming up.”

Jet Airways and Air India did not immediately respond to requests for comment.

Indian airlines are struggling under the weight of costly fuel and a weak rupee even though India is one of the world’s fastest growing aviation markets, with air passenger traffic forecast to triple to more than 450 million by 2020 as incomes rise.

Boeing now expects India’s commercial aviation fleet to grow more than five times in size over the next 20 years, with demand for 1,600 new airplanes valued at $205 billion.