Indian Airlines to expand fleet

NEW DELHI, JUNE 16. Indian Airlines (IA) has decided to dry-lease six 50-seater turbo-prop aircraft for operations to the north- east and a few feeder routes. The airline will invite bids from leasing companies and manufacturers in the next fortnight. If all goes well, these aircraft will join the IA fleet by year-end. The decision has the Government's backing.

The leased 50-seaters will be placed with Alliance Air, an IA subsidiary. Alliance has suffered a setback in its fleet (of 11 Boeing 737-200) renewal plan with the Government decision not to go in for new aircraft as privatisation of IA is on.

The 50-seater lease will be for three years. It is planned to station one aircraft at Guwahati. IA will hire and train 60 pilots and maintenance will be outsourced to cut cost. The decision is a major shift from the earlier proposal which was to buy six small-seaters for improving connectivity to the north- east. The small aircraft considered then were ATR-400s, Saab, Bombardier-8 and ATP-64. IA had then expressed reservations on the ground that the proposal was not viable due to high cost of operations and low fares. The fares to the north-east are lower by 46 per cent at present.

Now, the Government has approved lower sales tax on the aviation turbine fuel (ATF) for turbo-prop operations to the northeast. Instead of the average 22 per cent sales tax, fuel will be charged at about four per cent. Besides, there is a reduction of eight to nine per cent in fuel costs on account of deregulation of the ATF. Also, passengers will not be charged the Inland Air Travel Tax (IATT), which is 15 per cent of the fare. The Airports Authority of India has also been asked to lower the landing and navigation charges.