Why aircraft lessors’ woes may lead to costlier flights
NEW DELHI: Record high airfares hurting passengers could rise even further following yet another instance of foreign lessors facing roadblocks in repossessing their aircraft from a troubled Indian carrier.
Leasing aircraft could cost 2025% more for startups and financially weak Indian carriers after the Go First case where lessors are now barred from taking their planes back for at least six months, unless the NCLAT gives them some relief, people in the know said. Only IndiGo and Tata Group carriers led by Air India could be spared this increased cost as they are “good credit for lessors”.
“Lease rentals account for 1012% of an airline’s operating cost. A 2025% increase in lease rentals will mean overall cost rising by 23%, which will have to reflect in ticket prices. Except AI and IndiGo, it will be very challenging for other airlines, including startups.
