Wet leasing airplanes seems to be the flavor of the season in India, with two of the biggest budget airlines in the country going for it. While IndiGo will soon add Boeing 777s to its fleet, rival airline SpiceJet has also decided to add capacity by wet leasing Boeing 737 MAX aircraft.
SpiceJet to induct seven MAX planes soon
India’s low-cost carrier SpiceJet will reportedly have seven more Boeing 737 MAX aircraft by November end. A report by Business Line quotes sources who say that the decision to wet lease these airplanes was made to replace the recently deregistered planes following defaulting of lease payments.
It has been reported that the planes are coming from Turkish carrier Corendon Airlines, with three MAXs due to arrive by October end and the remaining by November end.
The carrier joins its rival IndiGo, which is also adding up to three Boeing 777 airplanes on wet lease from Turkish airline – a decision it has taken following a delayed supply of spare parts that has forced several of its narrowbody planes to be grounded.
Winter schedule to be lighter
SpiceJet currently faces a capacity cap enforced by India’s aviation regulator, the Directorate General of Civil Aviation (DGCA). While it had 600 flights approved for the summer schedule, it has been ordered to operate only half of those daily flights.
Now, it has emerged that the carrier is likely to keep its winter schedule even lighter and plans to operate fewer flights than what it was granted for the summer season.
While wet leasing aircraft comes with certain perks, such as the lessor supplying crew and maintenance for the planes, the overall operational costs also increase. SpiceJet’s finances have not been in the best of health lately, and many are wondering if wet leasing planes is a good idea at all.
The airline has been gravitating towards including MAX airplanes for a while now and intends to eventually replace its existing fleet of older generations 737s with the MAX variant.
It also managed to secure an additional loan from the government of around $122 million under the modified Emergency Credit Line Guarantee Scheme (ECLGS). A senior official had earlier noted that the additional funding will help it clear all statutory dues, lessor payments, induct brand new MAX planes and operate a younger fleet which will increase operational efficiency and support cash-profitable operations.
The airline has had to face questions lately about whether it can survive the challenging operating environment in India, given its financial woes. Inducting newer MAX planes seems to be part of its larger strategy, which also includes gathering more funds through loans and possibly a stake sale to survive these tough times. We’ll have to wait and see how successful these measures will be.
What do you feel about SpiceJet’s business strategy ahead of the winter schedule? Please leave a comment below.
Source: Business Line