Air-India to acquire six aircraft on lease

Air-India (A-I) is planning to acquire six long-range aircraft on lease to meet its route expansion demand. The national carrier will also acquire three more aircraft on lease for its low cost airline Air-India Express.

"A-I's aircraft utilisation is very high and we cannot expand further without sufficient aircraft. We have already signed lease agreement for A-I and will soon sign lease agreements for Air-India Express," V Thulasidas, chairman and managing director of A-I, said.

The Public Investment Board had approved the proposal for acquiring 50 new long range wide-bodied aircraft for Air-India and 18 B737-800W aircraft for Air-India Express. The aircraft for A-I and Air-India Express would, however, join the fleet by October 2006 and February 2007, respectively.

As the airline cannot wait for one year for expansion of routes, leasing route has become inevitable, Thulasidas said. "We are planning to acquire aircraft of either 747, 777 or A 330 configuration aircraft for A-I. We are close to finalising the configuration of A-I. Air-India Express will, however, opt for 777 - 800 aircraft," he said.

The idea is to have 10 aircraft for Air India Express and would explore more destinations in the Gulf and south east Asian routes.

Meanwhile, the empowered group of ministers (eGoM) is negotiating the total cost of acquiring 68 aircraft from Boeing. The Cabinet Committee for Economic Affairs (CCEA) and eGoM are likely to finalise the negotiations this week.

A letter of intent would be sent to Boeing, followed by the signing of a purchase agreement once the CCEA approval is received. The total cost of these aircraft and related infrastructure is estimated to be about Rs 35,000 crore, prior to negotiations with manufacturers of airframe and engines.