Home / Companies / News /  SpiceJet may lease Airbus planes to raise capacity

Mumbai: In a first, cash-strapped low-fare airline SpiceJet Ltd that uses Boeing Co. planes may lease Airbus Group SE jets to increase its capacity, according to two people close to the development. The airline has plans to wet lease 2-4 Airbus jets subject to availability, they said.

SpiceJet, controlled by Ajay Singh, currently operates 20 jets made by the US-based Boeing and 15 Q400 turboprop aircraft by the Canadian aerospace company Bombardier Inc. The second largest low-fare airline by passengers had to cut its fleet by one-third following a financial crisis.

Usually, airlines don’t go for aircraft from various makers as it increases engineering and training cost. To check that, SpiceJet is planning to use the so-called wet-lease mode, said one of the two people cited above. He did not disclose details of the leasing company.

A wet lease includes the pilots, cabin crew, maintenance support and the insurance cover, besides the aircraft, unlike a dry lease in which only the plane is leased.

A SpiceJet spokesperson did not offer any comments.

“SpiceJet is looking at enhancing its short-term capacity. The fastest option is via wet lease. SpiceJet is open to both Airbus and Boeing aircraft. This is not going to impact our engineering cost as we are going on wet lease route," the second person said.

The airline would be leasing Airbus SAS made planes for two to three months and would be operating by putting a SpiceJet sticker on the aircraft, he said.

Singh, a co-founder of SpiceJet who had exited the airline in 2010, is back in control after buying out the entire 58.5% stake of Kalanithi Maran and Kal Airways Pvt. Ltd on 23 February.

On 5 December 2014, the civil aviation ministry asked SpiceJet, which was raising some of its working capital through advance -ticket sales, to stop the sale of tickets more than a month in advance of the travel date.

That restriction came after the airline cancelled around 1,800 flights in December, following a reduction in its fleet size, largely owing to financial reasons.

However, the restriction on advance sales precipitated a crisis by drying up SpiceJet’s source of funds.

In December 2014, the airline briefly grounded its fleet after oil firms refused fuel supplies until it paid its dues. The aviation ministry later lifted the restriction on advance bookings.

“SpiceJet is now looking at adding four more planes to take total narrow body fleet to 24 in coming months," said the second executive.

In the past, SpiceJet had considered switching its entire Boeing fleet to Airbus fleet.

“Vendors keep talking to airlines about several such options. No such planes are examined by SpiceJet. It would be looking at Boeing planes for dry lease, which is long-term in nature," said the second executive.

Bharat Mahadevan, an independent consultant, said leasing the Airbus planes is not a great idea, as SpiceJet has already had major issues with operating two fleets, and this will make it a third fleet type.

“Low-cost carriers have efficiency of operations by operating a single fleet type. Mixing fleet type will increase costs. It would be a penny wise, pound foolish option even if it’s a wet lease," said Mahadevan.

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