Boeing and SpiceJet announced today a commitment for up to 205 aircraft during an event in New Delhi on 13th January.

Booked at the end of 2016, the announcement includes 100 new 737 MAX 8s, SpiceJet's current order for 42 MAXs, 13 additional 737 MAXs which were previously attributed to an unidentified customer on Boeing's Orders & Deliveries website, as well as purchase rights for 50 additional aircraft.

The order, coming one day after another Indian LCC, GoAir, confirmed an order for 72 A320neos, highlights the rapid growth of the country's air transport market.

SpiceJet currently operates 32 Boeing 737NGs, along with 17 Bombardier Dash 8 Q400s. It placed its first order with Boeing in 2005 for Next-Generation (NG) 737s. SpiceJet is India’s fourth-largest airline, behind IndiGo, Jet Airways and Air India.

Boeing notes that traffic growth in India is the highest in the world at 8.6%. In 2016, Indian domestic passenger traffic increased 21% from the previous year. Low cost carriers like SpiceJet account for more than 60% of all flights.

The latest edition of Boeing’s Current Market Outlook (CMO) forecasts a demand for 1,850 new airplanes in India, valued at $265 billion, over the next 20 years. Single-aisle aircraft are expected to account for 1,560 of the new deliveries.

However, the picture is not all rosy. Though the International Air Transport Association (IATA) predicts that India will become the world’s third largest aviation market by 2026, IATA director general and CEO Alexandre de Juniac recently warned:  “While many Indian airlines are now posting profits, the sector is still in loss territory with many challenges. These include a massive debt burden, onerous regulations, expensive airport infrastructure and high taxes.”