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Jet to lease three aircraft Boeing to Thai Airways

Jet to lease three aircraft Boeing to Thai Airways
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First Published: Thu, Mar 25 2010. 10 27 PM IST

Profitable move: The three-year deal with Thai Airways will bring in a little over $1 million per month for Jet Airways. Abhijit Bhatlekar / Mint
Profitable move: The three-year deal with Thai Airways will bring in a little over $1 million per month for Jet Airways. Abhijit Bhatlekar / Mint
Updated: Thu, Mar 25 2010. 10 27 PM IST
Mumbai: India’s largest carrier by traffic,Jet Airways (India) Ltd, said on Thursday that it will immediately lease out three Boeing 777-300ER (extra range) planes to Thai Airways International Pcl. for three years as part of its fleet and capacity rationalization.
Profitable move: The three-year deal with Thai Airways will bring in a little over $1 million per month for Jet Airways. Abhijit Bhatlekar / Mint
A senior Jet Airways executive said the deal will bring in a little over $1 million (Rs4.56 crore) a month. He did not want to be identified as he is not authorized to speak to the media.
Aviation analysts said the move will be profitable for the airline, but warned it could pose a problem if air traffic grew at a fast pace and Jet needed to use such large planes itself.
Jet was earlier negotiating with Royal Brunei Airlines for a dry-leasing deal—in which an aircraft is rented out without any crew, insurance or maintenance services—but failed to reach an agreement. It is currently dry-leasing four other 777 ER aircraft, which can seat up to 440 passengers, to Turkish Airlines.
Meanwhile, National Aviation Co. of India Ltd, or Nacil, which runs national flag carrier Air India, is struggling to find an airline to lease out six such planes, and has floated an open tender without even specifying a duration for the lease.
In 2008, Jet Airways’ closest competitor, Kingfisher Airlines Ltd, sold three of its five wide-body, 300-seaterAirbus A340 planes to Nigeria’s Arik Air Ltdfor an undisclosed amount. It sold two other aircraft in the same year but did not disclose the buyer’s identity or the amount.
In a statement, Jet Airways chief executive Nikos Kardassis said: “Jet Airways has worked with a focused approach over the last two years to more closely align the airline’s deployed capacity with current demand, streamlining costs in the process. The leasing of three of our wide-body B777-300ER aircraft is among the last steps to fully achieving this objective.”
Vijay Nara, an aviation analyst at domestic brokerage Centrum Broking Pvt. Ltd, said leasing out planes to Thai Airways was a positive development for Jet Airways. “In any case, these planes were grounded for (the) last few months after Gulf Air returned these flying machines to Jet Airways. This would add incremental revenue to Jet Airways’ PBT (profit before tax) directly as it is dry lease...It is expected to add Rs170-180 crore per annum for three years to Jet Airways’ PBT kitty,” he said.
However, leasing out planes could also pose a problem for the airline when international traffic grows at a faster pace, as Jet Airways may find it difficult to get hold of such large planes.
The International Air Transport Association has projected a growth of 5.1% in international traffic for India for this calendar year.
Jet Airways and its all-economy, low-fare subsidiary JetLite (India) Ltd have a combined fleet strength of 112 aircraft that make 490 trips daily.
pr.sanjai@livemint.com
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First Published: Thu, Mar 25 2010. 10 27 PM IST