New Delhi: Domestic airlines are beginning to find operating flights on leased aircraft a tad worrisome as a weak rupee has made rentals the fastest-growing expense item for them.
Among listed airlines, Jet Airways’ lease rentals grew nearly 32% to R364.48 crore in the first quarter of fiscal 2013-14 even as all other expenses, apart from employee costs, came down. Low-cost competitor SpiceJet, which recently embarked on a sale-and-lease back model, also faced a 12% increase in lease rentals during the quarter and ended up paying R219.79 crore compared to R196.25 crore in the same quarter last year.
Sources in the aircraft-leasing industry say that for unlisted airlines such as IndiGo and GoAir, the increase in lease rentals is anywhere between 15% and 20%. “Aircraft lease rentals are typically paid in US dollars, so with the rupee falling, the overall outgo for the airlines is increasing,” said a senior official from a US-based aircraft lessor.
Read news in full 21/08/13 Financial Express
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