Air India Express, Air India mull Jet planes lease as lenders secure assets

Air India and budget arm Air India Express are examining the possibility of leasing out some Boeing aircraft of crisis-hit Jet Airways that have suspended all national and international flights, according to media reports.

Jet, India's first private airline Naresh Goyal founded in 1992, halted all operations on April 17 after it became impossible to carry on as leasing companies grounded all leased aircraft over non-payment of dues and Jet's own aircraft were grounded after oil companies stopped fuel supply over pending bills. Though the leasing companies have flown out some of the aircraft for use elsewhere, many are still in the hangars of airports in India.

Air India is already discussing with banks to whom Jet owes a debt of about Rs 8,500 crore a proposal to lease five of Jet Airways wide-body Boeing 777s, the Economic Times reports. Air India Express, which operates flights mostly to Persian Gulf destinations from mainly South Indian airports, is interested in the Boeing 737 aircraft gathering dust.

"We are looking at leasing (B737 of Jet Airways) aircraft but there is no firm decision on this issue so far. As a matter-of-fact, there are a lot of other things that have to be looked at, like slots, sectors and timings, among others," Air India Express Chief Executive Officer Shyam K Sunder told PTI over the phone from Kochi, the airline's headquarter. When asked about the number of planes that his airline could induct from Jet Airways, he said, "We don't have a target number."

Air India Express, which has a fleet of 25 Boeing 737 planes, operates mostly to the Gulf destinations from Kerala and other South Indian airports. It also operates in the Southeast Asia sector besides to North and West India as well as on some domestic routes. The airline owns 17 and the rest are on lease.

Jet Airways has on its fleet, though grounded now, a large number of B737 aircraft. They included four 134-seat B737-700, 65 planes of 168-seat B737-800 category, two 166-seat B737-900 aircraft, and four 184-seat B737-900ER planes. Jet Airways has five 174-seat B737 MAX 8 aircraft on its fleet, but have been grounded on regulatory intervention following the worldwide grounding of that type of aircraft after an Ethiopian Airline crash near Addis Ababa on March 10, within five months of a similar crash of an Indonesian Lion Air flight near Jakarta.

Shyam Sunder also told PTI that the airline is recruiting 50 commanders from Jet Airways, of which 20 have already been hired. "We have already recruited a lot of pilots. We have about 20 of them already, all from Jet Airways as at present only Jet pilots are available in the market. Our intention is to hire up to 50 pilots. So we will be inducting another 25-30 pilots going forward," he said.

Meanwhile, Air India is eyeing the 10 aircraft B777-300ER 346-seat aircraft that Jet owns along with the routes. "Subject to approvals and financial viability, we can examine the possibility of taking five B777s on wet/dry lease basis from SBI (that heads the lenders' consortium), the terms for which can be mutually thrashed out," Air India chairman Ashwani Lohani said in a communique to SBI chairman Rajnish Kumar, according to a report in the Economic Times. The consortium now has a 50.1 per cent stake in Jet following the debt-equity conversion.

"We are Air India, are indeed saddened by the turn of affairs at Jet Airways, a scenario that is creating considerable inconvenience to the travelling public. In tune with Air India's role and responsibilities as the national carrier, we would be happy top alleviate this inconvenience by considering the possibility of operating a few B777 aircraft, on their established routes," Lohani said in his letter of April 17, according to the report. The letter mentions the Mumbai-London-Mumbai, Delhi-London-Delhi, Mumbai-Dubai-Mumbai, Delhi-Dubai-Delhi and Delhi-Singapore-Delhi routes, according to the report.