Air India to add 30 new Airbus aircrafts

Owing to a robust growth in domestic air traffic, Air India is planning to induct 30 Airbus A320 aircraft, 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 percent 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 percent 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.