January 21, 2016 TnH Global 0

Air India plans to induct 30 Airbus A320 aircraft

Air India is expected to record marginal operational profit, after ten years, in January-March quarter of 2015-16

National carrier Air India is planning to induct 30 Airbus A320 aircraft, due to a robust growth in domestic air traffic, taking its total fleet size to around 150 planes in the next three financial years.

“We want to capitalise on the domestic market which has witnessed a double-digit growth throughout this year. The yields in the domestic market are much higher for us,” said a senior AI official.

A substantial decline in jet fuel prices, which constitutes around 40 per cent of the total operational cost of an airline, allowed the domestic airlines to offer tickets at lower prices attracting air traffic.

It has also helped the Indian carriers in improving its balance sheet with both SpiceJet and Jet Airways zooming back to profit in the past quarters this year. Fares this year were 15-20 per cent lower than the previous year. Air India will induct up to 15 A320 aircraft on dry lease, without ground staff, insurance and supporting equipment. Deliveries are expected between April-December next year.

The aircraft will be on lease for a period of up to 12 years and will include both new and old planes, which are not older than six years at the time of leasing. Moreover, Air India plans to induct 15 more A320 and a request for proposal in this regard will be floated soon, the official added. In addition to these 30 A320 aircraft, Air India has already announced inducting new fuel-efficient 14 A320 neos (new engine option) to replace its older fleet. The delivery of these aircraft is expected to be between April 2017 and March 2019.

The airline will fly these aircraft on domestic routes. Air India is expected to record marginal operational profit, after 10 years, in January-March quarter of 2015-16.

As a part of its restructuring, the government has been continuously infusing capital into the loss-making airline since 2010-11. It has already pumped in Rs.22,000 crore out of the planned Rs.30,231 crore. Official data showed that the domestic airlines carried 8.12 crore passengers in 2015 compared to 6.74 crore passengers in the previous year, posting a robust growth of 20.34 per cent. In 2014, the domestic air traffic grew by 9.70 per cent.

However, in 2015, the domestic traffic share of AI dipped to 16.4 per cent from 18.4 per cent last year. Low-cost carrier IndiGo gained the most with a jump from a 31.8 per cent market shares in 2014 to 36.7 per cent in 2015. The market share of Jet Airways also went up slightly from 21.7 per cent in 2014 to 22.5 per cent in 2015.

According to its website, Air India has 118 aircraft in its fleet at present with 66 Airbus planes and 41 from Boeing. It plans to induct six Boeing 787 aircraft beginning November and the delivery of the pending three Boeing 777-300 ER aircraft is expected between January-March 2018, the official added.

News Source: thehindu.com