Alliance Air to resume bid for leasing ATRs

Ashwini Phadnis

NEW DELHI, Dec. 17

THE New Year will see Alliance Air, the wholly-owned subsidiary of Indian Airlines (IA), again entering the market to dry-lease six ATR-42-500 aircraft.

IA sources told Business Line that the airlines would accept bids from established leasing companies, owners and/or operators for dry-lease of six ATR 42-500 aircraft till January 11 next year. The airline plans to induct the 50-seater aircraft during the second half of next year for a period of five years.

The first lot of tenders for the dry leasing of the 50-seater aircraft closed in July this year. At that time, the airline was hopeful of getting the first lot of up to three dry-leased aircraft by December or January next and completing the entire exercise of dry leasing up to six aircraft in a phased manner during the crent fiscal. The airlines' attempts to lease the aircraft came to a naught earlier this month when negotiations broke down with the leasing companies. While officials are tight-lipped about the exact reason for the breakdown of talks sources claimed that the high lease rentals being sought was one of the primary causes for the negotiations failing.

IA had only recently renegotiated rates for leasing of six Airbus A-320 that resulted in a saving of around $15 million over a five-year period.

The airline is considering the leasing route for induction of the aircraft, as this would ensure that the airline does not need to tie up finance, except for paying for lease rentals. Besides, leasing would ensure that the airline did not take on too much of debt on its balance sheet, sources said.

The other advantage for IA would be that the induction of the small-seater aircraft would release the larger Boeing 737 and Airbus A-320 aircraft for deployment on more profitable routes, thereby, further improving the bottomline of the airline, sources said.

The induction of the aircraft will help the airline provide connectivity to 11 stations in the North-East instead of nine currently. Further, the airline hopes to be able to provide a daily service to all these stations, failing which attempts will be made to provide a five-times-a-week service to these stations.

The airline top brass has calculated that the induction of the new variety of aircraft should help increase connectivity in the north-eastern region by 30-35 per cent.

Furthermore, the airline hopes to tap new markets such as Kulu and Dehradun, besides plans of changing the aircraft currently used to operate flights to stations such as Lucknow and Bhopal, sources said.