The Hindu Business Line : Tight aircraft lease market may hamper AI's new destination plans

Mr V. Thulasidas (left), Chairman & Managing Director, Air India, with the Minister for Civil Aviation, Mr Praful Patel, in the cabin of the newly inducted Boeing-777 ER, in Mumbai on Thursday. — Shashi Ashiwal

Mumbai , Dec. 30

AIR India may have to revise its plans to service more destinations in 2005 as the aircraft lease market has become tight in the face of huge demand from airlines across the globe, according to Mr V. Thulasidas, Chairman and Managing Director.

He told presspersons here on Thursday that the outgo on lease rentals this year could not be compared with that of last year as the airline was leasing younger aircraft now, Mr Thulasidas said.

Mr Thulasidas was speaking at a function to mark the induction of the Boeing 777-ER, a new-generation wide-body aircraft with two engines, into the Air India fleet. Air India has inducted a new type of aircraft after a gap of 11 years; the last time it took on board a new aircraft was in 1993 when it introduced the Boeing 747-400.

The Boeing-777 ER, which is five years old, has been dry-leased for a monthly lease rental of $6.7 lakh. With its induction, the fleet strength of the national carrier has gone up to 35. The aircraft will be deployed on the Mumbai-London sector, which is serviced by a five-weekly service that departs from Mumbai at noon. It has 276 seats in a three-class format.

AI will lease two more B-777 aircraft in March 2005, which will be deployed on the Delhi-London and Delhi-Los Angeles sectors.

Despite the tight lease market, the budget carrier, Air-India Express, would begin operations on schedule on March 27, 2005, with three leased Boeing 737-800 aircraft, he said.

AI would tender for Boeing 747-400 aircraft soon. In 2005, the national carrier hoped to lease at least six more aircraft, and A-I Express seven additional aircraft.

Based on the availability of aircraft, Air India would offer more frequencies between Delhi and London, and also between Delhi and Los Angeles in 2005. AI was also keen to commence operations from Delhi via Amritsar to Birmingham and further to Toronto. It would also look to open operations to Australia via Singapore and to South Africa via Mauritius in 2005, he said.

AI would contract foreign pilots to commander the newly inducted Boeing 777. They would be assisted by Indian pilots, who were being trained to fly the new aircraft, he said.

According to the Minister for Civil Aviation, Mr Praful Patel, Cabinet approval for the purchase of 18 Boeing 737-800 aircraft for Air India Express was expected shortly. The AI board would finalise its shopping list for 50 aircraft, including ultra long-haul aircraft and MCLR (medium capacity long range) aircraft in the 250-and 350-seater capacities, in January 2005.

RFPs (requests for proposals) for restructuring Mumbai and Delhi airports would be released by the latter half of January 2005 and the technical and financial bidding for the same would be completed by March 31, Mr Patel said.

He added that at least 30 non-metro airports would be upgraded to world-class standards by 2007-08. The modernisation work would be financed through internal and external resources in a time-bound manner, he said.

Between Rs 5,000 crore and Rs 6,000 crore would be raised for the upgradation of the non-metros airports. The financing pattern for the Chennai and Kolkata airports was yet to be worked out.