Mumbai: National flag carrier Air India has lost a lease deal for three wide-body aircraft to rival Jet Airways (India) Ltd, two people familiar with the deal said.
Royal Brunei Airlines, which had been in talks with state-run National Aviation Co. of India Ltd (Nacil) earlier, has agreed to take the lease of three Boeing 777 planes from Jet Airways, said a senior executive at Air India, the country’s biggest by passengers flown.
The deal, however, is at a lower rate than Jet’s previous agreement with Gulf Air, which is returning the aircraft after deciding against extending its lease deal.
“Though Jet Airways could not manage to get the same rates they got from Gulf Air, the carrier has managed to strike a decent deal,” said an aircraft consultant close to the development.
Both the executive and the consultant did not want to be identified.
Boeing Co.’s 777 planes are used for long-haul routes and can seat up to 440 passengers.
A spokeswoman for Jet Airways said the deal with Royal Brunei Airlines it yet to be finalized.
“We have four Boeing 777 planes which we have leased out, and, in the next one or two weeks, we will finalize the lease-out plan for three more Boeing 777 aircraft,” said K.G. Vishwanath, vice-president (commercial strategy and investor relations), Jet Airways.
An email sent to Royal Brunei did not elicit response.
Air India is changing its strategy after it didn’t get a good response for its six Boeing 777 aircraft.
“We have now put the tender into an open-tender mode,” the Air India executive said. “Any interested party can pitch in for taking the plane on lease without any time frame. If the rates match, we will consider the proposal.”
During the economic downturn last year, India’s airlines found it difficult to fill large aircraft and froze expansions in some long-haul international routes, choosing instead to lease their big aircraft for some extra revenue.
That hasn’t been easy.
Jet Airways, too, has not been able to lease its wide-body Airbus SAS-made A330 planes for more than a year, after saying last January that it was looking to sell and lease back at least one of the 11 A330 aircraft in its fleet to raise money to meet operational costs.
On Tuesday, Jet said it would begin daily non-stop flights from Mumbai to Johannesburg from 14 April using A330 aircraft, which can seat up to 300 people.
Kingfisher Airlines Ltd, India’s second largest carrier, has been more successful in selling or leasing its large planes.
In 2008, the airline sold three of its five wide-body Airbus A340 planes, which have a seating capacity of up to 300 people each, to Nigeria’s Arik Air for an undisclosed sum.
Typically, an airline earns $2-2.2 million (around Rs9-10 crore) a month on leasing a wide-body aircraft, including maintenance. Without maintenance, the rate is $1-1.2 million a month.