Air India takes aviation war to smaller towns, may lease 11 turboprops

by Sindhu Bhattacharya [1] 46 mins ago

#air india [2] #CorporateStrategy [3] #SpiceJet [4] #turboprops [5] Till now, airlines in India have been fighting for market share on busy metro routes, with Mumbai-Delhi being the biggest battle ground. But the action may soon shift to smaller towns as airlines wake up to the potential across the Indian hinterland. SpiceJet [6] is already doing this in a big way through its Bombardier Q400 fleet operations. There was some talk earlier of IndiGo preparing to launch a new subsidiary for operating an ATR fleet (which the company subsequently denied) and now it is the turn of Air India. A senior airline official told Firstpost that Air India is in the final stages of making a decision on how many and which small aircraft to procure to strengthen its operations in tier II and tier III cities. It may lease as many as 11 turboprops for this purpose. A study group within the airline, which carried out an extensive feasibility study for enhancing operations in tier II and tier III towns, will soon recommend how many turbo-prop aircraft should be taken on lease and on which routes these aircraft should be deployed.

A study group within the airline, which carried out an extensive feasibility study for enhancing operations in tier II and tier III towns, will soon recommend how many turbo-prop aircraft should be taken on lease and on which routes these aircraft should be deployed. The tender for the lease should be out soon. The thinking right now is to evaluate the Bombardier Q 400 and ATR aircraft. At the moment the only thing we can say is that at least 11 aircraft in the Alliance Air (subsidiary of Air India) fleet will need to be replaced soon, a senior airline officer said when asked on how many aircraft were to be leased. Alliance Air is a 100 percent subsidiary of Air India. The aircraft will be taken on lease for anywhere between five to seven years. But why would AI even look at Q400, aircraft which are giving SpiceJet enough headaches with frequent breakdowns and rising maintenance costs? In a recent interview with Mint newspaper, SpiceJet CEO Neil Mills acknowledged there were some snags with the Q400 fleet. But it was a new aircraft type for us in the country; some of the snags will be to do with how experienced our guys are on the machine, but they have got a lot better. There were some known issues with the aircraft, and there are known issues with almost every aircraft type whether it has to do with bleed or with hydraulic pressure or leaks, etc. There are couple of issues that do keep reoccurring with the Qs. The AI official said the decision may eventually be made in favour of ATRs but as of now, Q400 have not been eliminated.

The decision to lease the turbo-prop aircraft comes at a time when the Ministry of Civil Aviation has been urging airlines to enhance connectivity to tier II and tier III cities. The state-owned airport operator, Airports Authority of India has also indicated that it could look at the possibility of providing concessions in terms of landing and parking charges to enhance air connectivity to tier II and III cities. The tender for leasing turbo-prop aircraft will be second tender for leasing of aircraft that Air India will be issuing this year. In May this year the airline board approved a proposal to lease 19 Airbus A-320 aircraft, which will be able to fly 180 passengers in an all-economy configuration. In fact Air India is leaving no stone unturned to improve performance. It has already considered a proposal to do away with meals entirely on some flights even if flyers are willing to pay for food. Now, a story in Business Standard this morning again talks of how meals can be had only for a fee on some other flights of Air India. If it does begin charging for meals on some flights, it would become the first full service carrier to do so. The revenues of Air India are expected to increase by 20.2 per cent to Rs 19,393 crore in the current financial year.

1. http://www.firstpost.com/author/sindhub 2. http://www.firstpost.com/tag/air-india 3. http://www.firstpost.com/tag/corporatestrategy 4. http://www.firstpost.com/tag/spicejet 5. http://www.firstpost.com/tag/turboprops 6. http://www.moneycontrol.com/india/stockpricequote/transportlogistics/spicejet/SJ01