Big airlines shop for small jets

The country’s scheduled domestic carriers are ordering over 150 small jets, which will be delivered in the next two to three years. Carriers like Indian, Jet Airways, Kingfisher Airlines and Paramount Airways, apart from a host of start-up airlines, are sewing up deals to acquire 50-70 seater aircraft for less congested routes. As many as 35-40 new small jets will join various fleets by the end of this year. Indian is planning to have 16 50-seater turboprop aircraft. This is in addition to its earlier plan to acquire six 70-seater regional jets on lease. Kingfisher Airlines is set to add 8 ATRs to its fleet this year, while it has already placed confirmed orders for 35 ATRs.

The country’s largest budget carrier, Air Deccan, will add 25 more 72-seater turboprop jets in the next three years. Start-up airlines such as MDLR Airlines are also planning to go in for Bombardier or Embraer jets to start point-to-point services. At present, only 18 per cent of the 400 civilian aircraft in the country are jets with below 100 seats, but in the next two years they would comprise over 37 per cent of the 600-odd aircraft in the Indian skies. One reason for this proliferation, of course, is the sops provided on small jets. Finance Minister P Chidambaram, while presenting the Union Budget 2007-08, had extended “declared goods status” for ATF sold to new generation small aircraft with a maximum take-off mass of less than 40,000 kg, operated by scheduled airlines.

ATF for these planes is exempted from sales tax (which can be in the range of 30 per cent). Explaining the demand for small jets, an Indian Airlines executive says: “ATRs consume less fuel than bigger jets. Regional jets are ideal to deploy on short-haul routes like Delhi-Kulu or Mumbai-Bhavnagar.” Added Kingfisher’s Executive Vice-President Hitesh Patel, “In the backdrop of the government’s route disbursal guidelines, no domestic airline can operate without two types of fleets. One cannot have profitable operations flying Airbus 320 or Boeing 737 aircraft to a tier-III city. An ATR is ideal for such operations.”

Courtesy: Business Standard

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