India's Air India is all set to almost double its fleet after the government decided to add over 100 aircraft - without burdening the exchequer with a mammoth debt burden like last time. The airline will supposedly grow, by leasing aircraft instead of purchasing them.
"AI will induct 100 more aircraft in next four years. We have decided not to seek any additional budgetary support, except for the turnaround plan approved for the airline earlier. The airline will lease aircraft and has the resources to make the payment that needs to be made for leasing," said Aviation Secretary RN Choubey. Financial aid of £3.02 billion was approved for Air India in 2012- out of which, £2.23 billion till March 2016 and another £171.30 million was to be given in FY16-17.
Modi Sarkar has decided that the airline's plan for growth will not lead to any enhancement in this equity support. AI has 118 planes, of which 41 are wide-bodied ones used on long haul and a few domestic routes, 66 narrow-bodied ones used on domestic and nearby international routes, and 11 are regional jets. Seventy seven planes are owned by the airline, 22 are sold and leased back and 19 are leased. "The airline is on track as far as its financial and operational improvement is concerned. It had an operating profit last fiscal and will be in net profit by 2019-20," Choubey said. By March 31, 2020, AI group is looking at a fleet of 232 as some planes from the 111-aircraft order placed in 2006 are yet to be delivered.
It will take 40 Airubs A-320s on lease for domestic and international routes, and will order another 35 turboprops. "AI management is talking to banks for debt restructuring," Choubey said. The airline's total loan is about £5 billion, of which £2.80 billion is working capital loan at an interest rate of 10 per cent. It is seeking to convert this working capital loan to 7 per cent LIC loan.
