New Delhi: IndiGo, the country’s largest airlines by market share, has made sure that its average fleet age remains four years till 2032. “It was a well thought-out fleet strategy that was made 10 years back, and not something done a couple of months ago,” said Aditya Ghosh, president.
The last plane of the three bulk orders of 530 aircraft that IndiGo has placed will come in 2026 — 100 Airbus A-320 in 2005, 180 A-320 Neos in 2011 and 250 A-320 Neos in 2015.
While other Indian carriers go for small orders of 20-25 planes, IndiGo’s bulk buying helped it negotiate rates better.
However, once all planes are delivered, IndiGo will not have a fleet of 530 planes — this is due to its famous “buy, sell and lease back” strategy. “At our peak we will have 330 planes,” Ghosh said.
Once the order is placed Ghosh explains that the planes are sold to lessors at market price.
“We buy planes at a lower price than what a seller would buy for. We gain right at the beginning — this is netted against our rentals and brings our cost down,” he said.
The planes are then leased back for the next six years —which means for the first six years IndiGo received a plane every month.
After that every month a plane goes out of IndiGo’s fleet and a new aircraft joins, thus reducing the average fleet age, and with an average fleet age that is low the cost of maintenance is also lower.
12/11/15 Sunny Sen/Financial Express
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The last plane of the three bulk orders of 530 aircraft that IndiGo has placed will come in 2026 — 100 Airbus A-320 in 2005, 180 A-320 Neos in 2011 and 250 A-320 Neos in 2015.
While other Indian carriers go for small orders of 20-25 planes, IndiGo’s bulk buying helped it negotiate rates better.
However, once all planes are delivered, IndiGo will not have a fleet of 530 planes — this is due to its famous “buy, sell and lease back” strategy. “At our peak we will have 330 planes,” Ghosh said.
Once the order is placed Ghosh explains that the planes are sold to lessors at market price.
“We buy planes at a lower price than what a seller would buy for. We gain right at the beginning — this is netted against our rentals and brings our cost down,” he said.
The planes are then leased back for the next six years —which means for the first six years IndiGo received a plane every month.
After that every month a plane goes out of IndiGo’s fleet and a new aircraft joins, thus reducing the average fleet age, and with an average fleet age that is low the cost of maintenance is also lower.
12/11/15 Sunny Sen/Financial Express
