Indian carriers seen buying more aircraft: CAPA

According to a report in The Hindu Business Line, pointing out that the operating environment for Indian carriers is looking ‘increasingly positive,’ the Centre for Asia Pacific Aviation (CAPA) in its report indicated that it expects domestic airlines in India to soon place orders for new aircraft.

In the mid-year outlook for Indian carriers, the Centre has indicated that while IndiGo is looking to acquire up to 150 aircraft, SpiceJet is looking to acquire 47 while Air India is planning to lease 10 Airbus A-330 apart from several Airbus A-320 and ATRs. 

CAPA expects that the Board (of SpiceJet) will shortly approve a new order for approximately 47 firm aircraft and 47 options. The airline plans to expand its operations in the south Indian market and focus on launching international sectors with a four to five hours flying time radius. The report mentioned that key destinations will include Sri Lanka, Singapore, Malaysia as well other South Asian Regional Cooperation (SAARC) and Southeast Asian destinations.

The report also mentioned that full service carriers namely Air India, Jet Airways/JetLite and Kingfisher, will take time to completely recover from the turbulence of the last couple of years largely due to the stress experienced on their balance sheet. The total debt across these three carriers is approximately USD 13.5 billion, with an annual interest burden in excess of USD one billion. This consists of approximately USD 7.5 billion in aircraft related debt and USD six billion of working capital and other loans. Outstanding amounts payable to vendors such as oil companies and airports is in addition to this.