Air India finds no takers for dry lease of Boeing 777

Air India (AI), the cash-strapped national carrier, is not finding potential customers to dry-lease its five wide-bodied Boeing 777-200 LR (Long Range) for six to 10 years despite having floated tenders at least thrice.

Industry sources say that poor seat configuration of these planes besides slowing demand and global meltdown are the reasons for the dull response. The eight 777-200 LRs with AI are 235-seaters, against the usual industry norm of 290-300 seats.

However, the carrier's officials are hopeful that a deal will be struck this time.

"We still have two more weeks to go. Generally, customers apply for tender at the very last moment," said a senior Air India official on Sunday.

The idea behind the plane seating configuration was to operate the aircraft on ultra long-haul routes like Chicago, New York and Toronto on premium fares, but that did not materialise, sources said. This forced the airline to deploy them on medium haul sectors such as Hong Kong, Shanghai and London rendering the aircraft operations economically unviable.

AI had almost got into an agreement with Air Canada to lease these planes but the deal fell through at the last minute due to the seating configuration, sources added.

There are many carriers like Kingfisher Airlines, which have been forced to give away its 34 aircraft to lessors as it has failed to pay Rs 1,000 crore as yearly rent. "There are hundreds of other aircraft that are lying idle. It is not easy for Air India to lease their planes," said an airline official.

AI had acquired the 777s as part of its 67 aircraft order from Boeing in 2005. At present, it has 20 777s, of which eight are 777-200 LRs while the rest are 777-300 extended range planes.

AI decided to do away with the Boeing 777 by leasing them as soon as it got an indication about the delivery of Dreamliners early this year.

The first dry-lease tender was floated on January 2.

Since January, the airline has been trying to do away with these aircraft following the decision to operate the 787 Dreamliners in their place.

Courtesy: Mail Today