Tuesday, June 09, 2020

Airlines look to trim rental expenses to support bottom line: Report

Indian aviation companies are renegotiating rental contracts in a bid to improve bottom lines as the industry took big hits globally and domestically due to the coronavirus pandemic. The losses are expected to continue as services have been sharply curtailed despite resumption.

Airlines have approached leasers for the deferment and reduction of rental costs and have received some concessions – such as partial deferment between three to eight months, experts told Mint.
Moneycontrol could not independently verify the report.

Among major players, IndiGo which has resumed 20 percent of operating capacity has managed to gain 50 percent relief on supplementary rentals (maintenance costs) – for grounded fleet. As per CFO Aditya Pande, since supplementary costs increase the more you fly, the cost does not accrue.
SpiceJet has also negotiated leasing costs, with a “lessor payments – majority of fixed costs mutually deferred or waived,” it said.
09/06/20 Moneycontrol.com

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