Airlines are facing a new cost crunch due to rising aircraft lease rentals, which have gone up by 20 per cent due to shortages in the international market. | |
| Rentals for aircraft with a basic configuration have shot up by 33 per cent to reach $400,000 a month from $300,000 a month for popular models such as Airbus A320 and Boeing B737. Lease rentals for higher configuration (for full service airlines) are as high as $550,000. |
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| "There is a shortage of bigger jets following the delay in the A380 production schedule," an Air-India executive said. |
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| Aviation industry experts said lease rentals were moving northwards mainly due to an increase in the London Interbank Offered Rate (Libor). |
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| "Libor is hovering around 5.12-5.25 per cent compared with 2.50-2.75 in 2004," they added. The aircraft shortage is mainly because of a boom in aviation, resurgence of tourism, and a high rate of economic growth in countries like India, China and South-East Asian countries. |
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| "Our company has a locked lease agreement for eight aircraft when the Libor was between 2.75 per cent and 3.25 per cent. The current increase will only impact start-up airlines or existing airlines that want to add capacity," said Mohan Kumar, director (finance), Air Deccan. |
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| An Indian Airlines executive pointed out that popular models were not available in the market. The response to the tenders floated for leasing aircraft by Indian Airlines and Air-India was weak. |
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