Govt plans plane leasing to support regional flights plan
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New Delhi: India is considering buying and leasing small planes to local carriers as part of Prime Minister Narendra Modi’s plan to connect remote towns and villages by air, people familiar with the proposal said.
To succeed, Modi’s plans would need small, 20-seat aircraft, which are usually not leased out by traditional aircraft-renting companies, the people said, declining to be identified because the proposal hasn’t been made public. The government would either use an existing state-run company or set up a new entity for this, one of the people said.
Only 75 out of India’s 450 airfields have scheduled commercial operations as carriers shy away from flying to remote areas. Modi wants to revive them by offering subsidies to airlines plying those routes. Having smaller planes will help the carriers fill up most seats and help the government objective of connectivity, the people said.
The Indian market is currently dominated jets manufactured by Boeing Co. and Airbus Group SE -- which seat as many as 180 people. Some carriers like Air India Ltd and SpiceJet Ltd also fly smaller aircraft with fewer than 100 seats. Filling even those could be difficult on remote routes, the people said.
“There are several proposals in the ministry all the time,” aviation secretary R.N. Choubey said Friday. “This is not something we are focusing on right now.”
The proposal for leasing aircraft would allow carriers to lease small planes for three years—the duration of the so-called Regional Connectivity Scheme—instead of longer tenures that aircraft-leasing companies usually prefer, one person said. Bloomberg