Jet Airways in talks with Etihad over leased planes

Etihad has taken 6 Boeing 777-300 ERs and one A330-200 on lease from Jet in which the former holds 24% equity stakes

Jet Airways is evaluating the option of extending the lease of its seven planes with its equity-partner Etihad Airways. If the lease is extended, this could result in Jet Airways pushing back its plans to expand its services in the United States.

“We have the option of extending it (the lease) with Etihad. Currently, this (the lease) is ending by the end of this year. We are working on some options with Etihad,” said Krishnan Balakrishnan, vice-president (fleet and management control) of Jet, during a post-earnings analytics call.

The Abu Dhabi-based airline has taken six Boeing 777-300 ERs and one A330-200 on lease from Jet in which the former holds 24 per cent equity stakes.

The lease of Boeing aircraft is set to expire by the end of this year, while the A300-200 lease will end by June 2016.

At present, the airline has 116 planes in its fleets – 24 are owned and the remaining 92 are on lease.

The airline said 10 of these aircrafts had been leased out to other airlines – seven to Etihad and three to Turkish Airlines.

The Mumbai-based full service airline said it was evaluating its plan to operate flights to the US. “We are working on the options right now…We are working through the opportunities in context of wide- and narrow-body (planes) and we will fly where it makes economic sense,” Chief Executive Cramer Ball said.

Before the US Federal Aviation Administration (FAA) downgraded India's aviation safety rating, Jet had indicated that it would fly to more routes to the US.

The downgrade had put a curb on Indian carriers from either expanding their operations to the US or entering into any code share agreement with the airlines there.

Jet and Etihad had announced the launch of Abu Dhabi-New York flight from March last year.

According to the plan, Etihad was to operate the flight with a Boeing 777 leased from Jet and later, May onwards, Jet was supposed to operate it. However, the FAA downgrade had stalled the move.

In April this year, the FAA restored the aviation safety rating back to Category-I, allowing Indian airlines to enhance their services in the US skies. At present, only Jet and Air India operate flights to the US. At present, Jet operates from New Delhi to Newark in the US.