Airlines eye orders as income stream

New Delhi/Mumbai: Cashing in on a sharp increase in global aircraft prices, Indian domestic carriers hope to earn around $100 million (Rs 400 crore) in 2008 by either hawking their delivery slots with aircraft manufacturers or by entering sale and leaseback deals with leasing companies.
The income earned from such activities is crucial for the domestic airline industry, which had accumulated losses of over Rs 2,200 crore in 2007. These losses are expected to rise to Rs 2,800 crore in 2008.
With capacity growth outstripping demand, many leading low-cost carriers in particular are cutting aircraft delivery schedules to consolidate growth plans and reduce mounting losses.
In 2007, the available seats per km were 51 billion against a demand for 35 billion.
Air Deccan expects to earn $30 million by selling delivery slots to other carriers and leasing companies. Air Deccan took delivery of 20 aircraft in 2005 and 10 in 2007.
Spicejet is expected to earn Rs 160 crore as premium for a sale and leaseback deal with a leasing company.
GoAir is expected to earn Rs 80 crore to Rs 150 crore this year from this alone.
Kingfisher Airlines, which is on an expansion spree especially as it enters international skies, said that it is not averse selling slots in 2009 if it gets a good price.
09/02/08
Surajeet Das Gupta & Manisha Singhal/Business Standard

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Categories: Indian Aviation- In General Feb 2008, New Feb 2008