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Air India is currently evaluating whether to induct the Airbus320 New Engine Option (NEO) aircraft into its fleet after 2017.**At the moment IndiGo is the only Indian carrier which has ordered the NEO aircraft, having ordered another 250 aircraft on Wednesday.
The European aircraft manufacturer Airbus charges a premium for each NEO it delivers as it promises 15 per cent fuel burn savings among other benefits, such as noise reduction and lower maintenance and operating costs. The manufacturer believes that an airline opting for the NEO will be able to save in excess of $12 million on each aircraft every year. Hence, it charges about half of the saving potential for each NEO aircraft, a senior Airbus official had told BusinessLine in 2011.
In 2011, Airbus charged a premium of $6.2 million for each NEO on A-319, A-320 and A-321 aircraft. At the moment IndiGo is the only Indian carrier to have ordered the NEO. The new aircraft, developed by the European aircraft manufacturer, will help Air India further bolster its financial performance which has been on the upswing in the recent past.
The latest financial data of the airline shows that during April-September this year 89 per cent of the domestic flights operated by it met their variable costs as compared to the same period previously. This means that these flights were able to meet their fuel costs and handling and navigational charges, a senior official said. The airline registered an 11 per cent growth in network revenue at ₹8,114 crore up from ₹7,289 crore reported during the same period previously.
The airline was able to achieve this despite April-September being a lean season when most airlines report a decline in the number of passengers carried, the official added. The greater use of the Boeing 787 on several international routes, which were earlier operated by the Boeing 777 as well, as being in a position to negotiate better contracts for aviation fuel were among the reasons for the better financial performance of the airline, the official added.
Correction: ** In the lead para, the second line should read as: At the moment IndiGo and GoAir are among the Indian carriers which have ordered the NEO aircraft.
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