Air India to lease out fuel guzzling 777s

New Delhi -  Air India will lease out some of its fuel-guzzling Boeing 777s to private airlines to save on costs and restructure international operations on receiving the first  batch of 787 Dreamliners in about a month.

"There was a need for a long time to replace the 777s with more fuel-efficient aircraft like the 787s. But due to the delay in 787s delivery we were not able to do so... with the things  progressing for the induction of the 787s we are hopeful of leasing out some of the 777s," a top Air India official told IANS.

"787 will be operated on routes where the 777s are used like ultra-long haul destinations in the US and Canada. The aircraft with its seating configuration of 256 is also best suited for these  loss-making routes as sometimes there are not enough passengers to fill the 777s."

The Boeing 787 aircraft is made of composite materials. The newly-developed engine and advanced flight technologies make it highly fuel-efficient. The plane can fly up to 16,000 km  non-stop.

The plan comes amid talks that the Cabinet Committee on Economic Affairs (CCEA) may take a favourable decision to induct the 787s, after studying the final compensation package to be  offered by Boeing for the delay in deliveries.

"After we get a clearance we expect to induct around three aircraft within June or July. Rest of the 24 aircraft will follow soon," the official, who declined to be identified, said.

The dry-lease of at least five of the eight 777-200 long range (LR) aircraft will bring in sufficient cash flows to the airline and help it save fuel costs, the official said.

In dry-lease an aircraft is provided without a crew, maintainance and insurance.

Earlier, the national carrier had floated a global tender to dry-lease 777-200 LRs for 8-10 years. When asked about a response, the official said: "We have received a healthy response form  other airlines as well as leasing agencies. Talks are progressing and we are going through the prescribed channels."

In terms of cost saving on fuel, the plan will help the airline restructure some of the loss-making routes and optimally utilise its manpower.

"Some routes like Delhi-New York, Mumbai-New Jersey are heavy loss-making routes, where we are not able to meet fuel cost of the operations by the way of ticket revenue collections. An  average loss is to the tune of Rs.10 crore (Rs 100 million/nearly 2 mn USD) per month on one ultra-long flight destination."

Incidentally, a bulk of Air India's 20 777-200s and 777-300s are currently grounded due to the ongoing pilots agitation.