Govt puts AI Express' aircraft lease plan on hold

New Delhi: The government has put on hold Air India Express' controversial plan to take on wet lease four aircraft. The aviation ministry will now review this decision of the LCC's board following fears that such an expensive deal of taking planes with entire crew on rental will deal a severe blow to the airline's bottomline.
AI Express currently has 21 Boeing 737 in its fleet, of which four are on lease and were due to be returned. Since two planes are on ground for regular maintenance by rotation, only 19 planes fly at any given time. The airline board then decided to have four planes on dry lease and as many on wet lease. It is learnt to have shortlisted a Turkish company for wet leasing the four planes for a hefty sum. But with new aviation minister Vayalar Ravi deciding to examine all problems and fears of employees, the expensive wet lease plan has been put on hold.
"Given the way foreign carriers are targeting south India and new players like SpiceJet and IndiGo planning to shore up LCC operations, a fleet size of 17 for AI Express would have rendered us uncompetitive. However, instead of wet lease, dry lease will be a much more economical option for us," said an airline insider.
18/02/11 Saurabh Sinha/Times of India

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Categories: Air India Budget Feb 2011, Air India Feb 2011