Jet Airways may sub-lease ATRs to TruJet

Full-service carrier Jet Airways may sub-lease out its fleet of ATR planes to regional carrier TruJet. The deal, which is taking final shape, could be announced in two months, said people aware of the development. Jet has 15 ATR 72-500s and three ATR 72-600s, which are leased from foreign lessors.

The deal may see Jet leasing out the planes in a phased manner, starting with six planes in the first phase. The move may help the company earn some cash at a time the carrier is looking for funds for its fleet induction and expansion plans. The airline appointed JPMorgan to help raise funds. Jet's management has been in talks with Delta Air Lines for a stake sale. Simultaneously, its founder-chairman Naresh Goyal is talking with Etihad Airways for capital infusion. Etihad holds 24 per cent stake in Jet. A Jet spokesperson declined to comment.

TruJet, which is registered as Turbo Megha Airways, had aggressively participated in the first round of bidding under government's Regional Connectivity Scheme (RCS) and won the right to operate nine routes. The airline has already started flying in three of these routes: Hyderabad-Kadapa, Hyderabad-Nanded and Nanded-Mumbai. A TruJet executive confirmed that the airline is in discussions to lease the planes from Jet. 

"The talks are on for dry leases of planes in a phased manner," he said. For TruJet, it will give a boost to expansion plans. The airline, which has five ATRs at present, plans to induct five planes this year to grow its network. Currently, it operates 28 flights daily to 10 destinations, including RCS routes. According to plans submitted to regulator, the airline wants to expand operations to cities in western India like Vadodara, Ahmedabad and Nagpur. 

Two other airlines which will operate under RCS, Air Odisha and Air Deccan, are in talks to induct Beechcraft 1900D aircraft.

Business Standard had earlier reported Jet's plan of phasing out ATR fleet because a larger focus on international routes meant ATRs didn't fit the scheme of things. Add to that a scarcity of pilots to fly smaller planes and high maintenance costs. At present, expat pilots operate most ATRs for the airline, which leads to higher costs. For an airline, the cost of an expat pilot is at least four times that of an Indian pilot. "ATRs no more suit our strategy. Their maintenance costs are higher, getting pilots for them is difficult, and for the management it was becoming too difficult as the network strategy of operating an ATR is very different from that of a Boeing 737 or Airbus A330," a person aware of the development said.