Air India Refurbishes Old Fleet Via Dry Lease Deals

Monday, 15th June 2015 at 08:29am

Air India's (AI) Airbus A320 air carriers are already due for replacement and it has entered into a deals with Kuwait and China-based lessors to refurbish these.

At present, AI requires around 19 new planes that will replace its older A320s. AI's plan is to dry lease 14 A320s (NEOs) from an aircraft leasing firm in Kuwait and another 5 A320s (CEOs) from a lessor based in China. Out of these 5 planes, one was already delivered first quarter of the year while the remaining 4 will be delivered last quarter of this year.

According to a senior officer of AI, the Kuwaiti firm has committed to lease out the 14 A320s with New Engine Options starting 2017 until 2018. Said official disclosed that the firm was selected from a number of firms which have submitted their lease offering.

The lease agreement covers a 10-year time frame, from 2018 to 2028.

More than a decade ago, AI has leased air carriers from Aviation Lease and Finance Co. (ALAFCO) which is also Kuwait-based.

The airline is likewise exploring the possibility of entering into supply agreements with CFM as well as Pratt and Whitney for the leased aircrafts' engine requirements.

At present, AI has more than 60 narrow-bodied aircrafts. These consist of A-319, 320, and 321s some of which, particularly the A320s are more than 25 years old. For this reason, a replacement program has become inevitable.

Typically, an aircraft lessor charges a monthly leasing fee of up to one percent of the cost of an aircraft.

According to an Airbus manufacturer from Europe, the price of single A320 ranges from US$ 97 million to US$ 106 million, depending on the engine type option.

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