The Hindu Business Line : Air Deccan gets more A320s on lease

The airline has leased these aircraft from the Singapore Aircraft Leasing Enterprise (SALE). The two aircraft were handed over to Air Deccan at a special ceremony at the Airbus headquarters here.

In addition to the leased aircraft, the airline plans to purchase 30 more A320 aircraft for a ticker price of $1.8 billion.

Air Deccan, which had obtained three A320s on lease from SALE, expects to acquire two more A320s later this year for which it had already placed orders. SALE, one of the leading aircraft leasing companies in Asia, has said it was bullish about India because of the boom in low-cost airlines there.

The Managing Director of Air Deccan, Capt G.R. Gopinath, said that the acquisition of new aircraft would enable the company to achieve its growth target this year. Shortage of aircraft had hit its growth earlier because it could not ramp its network faster. "In less than one year, we have brought a new concept of travel to the Indian market enabling more people to fly at cheaper fares," Capt Gopinath said. The Airbus deal with Air Deccan involves a total of 37 aircraft of which two are from a previous contract, five on lease basis and the rest from the new contract it signed recently.

Air Deccan recently entered into a deal with Capital One and ICICI VF to raise $40 million, with the possibility of going in for another $10 million from the same partners. Both these agencies will get 13 per cent each in the parent company, Deccan Aviation.

Capt Gopinath had earlier said that new acquisition would be through a guarantee from European export credit agency. While the European agency will stand guarantee for 85 per cent of the acquisition cost, the rest will be raised through Air Deccan's own funds and some local banks.

Aircraft maker, Airbus Industrie last month said it was revising its projections for India. It now expects that India will require about 400 aircraft by 2019, nearly double the projections it had made earlier.

Airbus expects to have a share of over 50 per cent of the Indian market. The growth would be fuelled by the rise in the number of low-cost airline in India and expansion plans of existing players.

Capt Gopinath said the new aircraft would serve to help Air Deccan to strengthen its trunk routes. One of the two aircraft would be based out of Delhi to connect Delhi-Bangalore, Delhi-Hyderabad and Delhi-Kolkata while the other would be operated between Hyderabad-Mumbai. These sectors, he said, were witnessing a fast growth in passenger traffic for low cost flying.

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