2 min read.Updated: 29 Sep 2021, 12:18 AM ISTRhik Kundu
Most leasing firms, especially in the US and Europe, are apprehensive about leasing their aircraft to Indian non-scheduled carriers and want huge financial securities for such leases after their experiences with Indian companies defaulting on lease rentals in the past, said JetSetGo Aviation Services CEO
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NEW DELHI :
A spurt in demand has left private charter and business aviation firms struggling to arrange planes for their clients with most foreign leasing firms wary of giving aircraft to Indian operators. An increasing number of affluent Indians are opting for private jets ahead of the festive season for holidays and other travel plans amid an easing of the pandemic and travel curbs especially on international destinations.
“Most leasing companies, especially in the US and Europe, are apprehensive about leasing their aircraft to Indian non-scheduled carriers (like private charters and business aviation companies) and want huge financial securities for such leases after their experiences with Indian companies defaulting on lease rentals in the past," said Kanika Tekriwal, founder and chief executive officer of private jet aggregator JetSetGo Aviation Services Pvt. Ltd.
Most planes used by private charters and business aviation firms are owned and only a few are on operating leases. In comparison, most aircraft operated by commercial airlines are often leased as operators prefer to transfer the risk of ownership to lessors. A growing number of business aviation firms now want to opt for operating leases to quickly augment their fleet and increase capacity to take advantage of a demand surge.
Ownership of aircraft is not only expensive with owners having to bear depreciation costs, but it also takes time for the aircraft to be delivered after placing an order, said an aviation consultant with a major consultancy firm, who didn’t want to be named.
Leasing firms in US and Europe are very sceptical about leasing their aircraft to Indian non-scheduled operators, said Sanjay Julka, chief executive officer, technical, Club One Air, one of India’s top charter planes operators. “Most of these companies are however unaware that regulations have changed in the last two years and it is easier for lessors now to deregister their aircraft and take them back," Julka said, adding procuring operating leases from abroad is not an issue with scheduled carriers as they have a robust leasing structure in place.
Meanwhile, private charter bookings have picked up ahead of the festive season. “With ease in travel restrictions in various international destinations, more travellers are becoming comfortable with booking flights 30 to 45 days prior to the date of travel. Requests from parents of students studying abroad are also pouring in," said JetSetGo’s Tekriwal.
The private jet aggregator expects at least a 30% growth in demand for private jets this year. “Domestically, it has more or less picked up to a great extent. However, due to uncertainties for international travel, we are currently witnessing travel booking requested for selected places like Maldives, Dubai, Sri Lanka, Ukraine, Russia and some of the European countries, internationally," Tekriwal said.