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Jet Airways may lease out ATRs to TruJet

The move is likely to help the company earn money at a time when it is looking for fleet induction

Aneesh Phadnis & Arindam Majumder  |  Mumbai/New Delhi 

Jet Airways

In order to raise funds, full-service carrier has decided to sublease out its fleet of ATR planes to TrueJet. 

The deal, which is taking a final shape, could be announced in two months, said people aware of the development. Jet has 15 ATR 72-500s and three ATR 72-600s which are leased from foreign lessors.

The deal may see leasing out the planes in a phased manner, starting with six planes in the first phase. 

The move is likely to help the company earn money at a time when it is looking for funds for its fleet induction and expansion plans. The appointed J P Morgan to help raise funds. Jet's management has been in talks with Delta for a stake sale. Simultaneously, its founder chairman Naresh Goyal is talking to Etihad, too, for capital infusion. holds 24 per cent stake in A spokesperson declined to comment.

TrueJet, which is registered as Turbo Megha Airways, aggressively participated in the first round of bidding of Regional Connectivity Scheme (RCS) and won the right to operate nine routes. The has already started flying in three of these routes — Hyderabad-Kadapa, Hyderabad-Nanded and Nanded-Mumbai. A TrueJet executive confirmed that the is in discussion to lease the planes from  

"The talks are for dry leases of planes in a phased manner," he said. 

For TrueJet, it will give a boost to their fleet and destination expansion plans. The airline, which has five at present, plans to induct about five planes this year to grow its network. 

Currently, it operates 28 flights daily to 10 destinations, including the RCS routes. According to plans submitted to the Directorate General of Civil Aviation (DGCA), the wants to expand operations to cities in western India like Vadodara, Ahmedabad and Nagpur. Two other airlines, which will operate under RCS — Air Odisha and Air Deccan — are in talks to induct Beechcraft 1900D

It had been reported earlier that was planning to phase out its ATR fleet. Officials say that the felt, given a larger focus on international routes, did not fit in the present scheme of things. Add to that, a scarcity of pilots to fly smaller planes and high maintenance costs. At present, expat pilots operate most for the airline, which leads to higher costs. For an airline, the cost of an expat pilot is at least four times that of an Indian pilot. 

"no more suit our strategy. Their maintenance costs are higher, getting pilots for them is difficult, and for the management, it was becoming too difficult as the network strategy of operating an ATR is very different from that of a 737 or A330," a person aware of the development said.

First Published: Tue, July 18 2017. 19:42 IST