Govt mulls allowing airlines pool aircraft orders

The move will help domestic airlines to negotiate better terms with aircraft manufacturers

To help reduce costs, the Ministry of Civil Aviation is looking to allow carriers pool their orders for purchase of aircraft.

The move, if implemented, would help domestic airlines to negotiate better terms with aircraft manufacturers and in turn bring down the overall associated costs.

The idea of pooling aircraft orders is being discussed with the stakeholders and is at an initial stage, a senior Ministry official said today.

"It is a good idea... Where airlines can come together and place their orders (for aircraft)," the official said, adding that the matter is being discussed with carriers and IATA (International Air Transport Association), among others.

The proposal is part of the Ministry looking at various possibilities to reduce costs incurred by domestic carriers in acquisition of aircraft.

Leading aircraft makers -- Airbus and Boeing -- have projected increased demand from India for new aircraft in the coming decades.

Last month, Airbus had said that growing passenger traffic in India and other emerging markets would help generate aircraft demand worth USD 5 trillion in 20 years.

In its recent report, aviation think tank CAPA had said that last few years have been some of the most challenging in India's aviation history.

"Over-capacity, high input costs, intense competition and a negative policy and regulatory environment conspired to threaten the viability of virtually the entire aviation value chain," it had said.