Airlines India, Indian Airlines

Like other Indian air carriers, Indigo airlines has also executed a sale and leaseback deal on the five jets. The airline has booked 100 Airbus A-320s and is planning to execute similar lease deals for the first 15 airbus A-320s. Sale and lease back process is being adopted by most of the airlines across the world. In this type of arrangement the carrier has the ease to pay out from the earnings from the aircraft. Indian carriers Jet Airways, Deccan Aviation and Kingfisher Airlines have also closed such kind of deals.

At present Indigo has a fleet of five Jets and has booked Airbus A-320s to enlarge its fleet. Indigo is operating as a low cost budget airline. The company has not bought any aircraft and is playing safe by executing sale and lease back deal to maintain cash flows. The airline is aiming at a faster growth in future.

Jet Airways has announced a daily flight from Kolkata to Port Blair from 11th November 2006. This is going to be the first foreign flight from kolkata. Additionally the airline will also commence a daily flight to Bangkok from Delhi from the same date. For the Kolkata Port Blair flight, Jet Airlines will keep four aircrafts of its fleet at Kolkata.

Presently Jet Airways’ 17 percent revenue comes from international operations and 83 percent from domestic operations. The airline is aiming at a 50 percent revenue from international operations as the competition in the domestic market is getting stiffer. Jet is already flying to Britain, Clolombo, Kuala Lumpur, Kathmandu and Singapore. Besides, the airline has applied for approval to fly in United States and the airline is planning to add more destinations like Canada, China, South Africa, etc. to its list. The margins on international flights are better than domestic flights. The airline is already trying to cut down its fixed costs and come out profitable in the next financial year. With increase in international operations the airline is expecting to boos its revenues and will be able to thrive in the competitive domestic market.

Air Deccan has said it will stop flying unprofitable routes, as it seeks to come into the black by 2008. The Bangalore-based budget airline aims to carry 80 lakh passengers in 2007, compared with 45 lakh this year, and aims to break even on as many routes as possible by cutting operation costs. It has not indicated which routes will be affected by the plan.

Air Deccan, Jet Airways, Spicejet, Kingfisher Airlines and other private airlines are facing losses as a result of increasing competition, which is squeezing their margins. Air Deccan made a loss of Rs341 crore ($74 million) in the 15 months ending June 2006. Indian private carriers will probably make a combined loss of Rs1,125 crore ($250 million) this year and next, as they cut fares to as low as 1 rupee to maximise capacity utilisation.
Redeploying excess capacity and containing costs by utilising aircraft for longer hours could help Air Deccan and other budget airlines emerge from losses. Air Deccan is India’s second-biggest airline by market share behind Jet Airways.

The airline recently sold and leased back two Airbus SAS planes and three spare engines to balance its books. The company will consider similar deals for more planes. Air Deccan has 92 planes on order, valued at Rs 17,000 crore ($3.8 billion), to be delivered by 2012, most from Airbus. The airline has postponed a plan to start overseas routes in a joint venture in Sri Lanka, to focus on the turnaround.

The airline today announced a Rs675 crore ($150 million) 10-year maintenance agreement with Lufthansa Technik to support its fleet of 14 Airbus planes. Lufthansa Technik and its Indian subsidiary One Stop Airline MRO Support will independently serve the fleet of 60 Airbus A320 airplanes with spares at the carrier’s hub, Bangalore, Air Deccan and Lufthansa said in a joint press release. Lufthansa Technik will set up a regional pool of spares in India because of increasing demand in South Asian countries.

Budget carrier Air Deccan on Friday said it had signed a $150 million contract with Germany’s Lufthansa Technik to repair, maintain and overhaul its fleet of 14 Airbus A-320 aircraft.

Air Deccan, run by Deccan Aviation Ltd., in a statement said the agreement “also encompasses setting up of a home base of spares to support” it in Bangalore.

Lufthansa Technik is the aircraft maintenance, repair and overhaul division of German air carrier Deutsche Lufthansa.

Deccan Aviation shares ended 1.1 percent higher at 102.80 rupees in a firm Mumbai market.

Budget carrier Air Deccan has awarded maintenance contract to Oman Air.
Oman Air’s engineering and maintenance division has signed a technical service agreement to perform heavy-base maintenance work on Air Deccan ATR 42-500 fleet of aircraft.

On September 21, the first aircraft was brought to the company hangar to carry out a major check (C-Check). It is estimated that the check will take two weeks.

“This is our first third-party base maintenance contract,” Salim Al Kindy, Oman Air’s Divisional Manager Engineering and Maintenance Division, said.

Depending on the Air Deccan/Oman Air Engineering review, Oman Air Engineering expects to get more business from Air Deccan pertaining to ATR72, a superior engine power and improved interiors aircrafts compared to the ATR 42-500, he said.