Air India not to defer new deliveries

New Delhi: National flag carrier, Air India, has said that it will not defer deliveries of new planes, or cancel orders, despite a market slowdown. New deliveries will be used to replace leased aircraft, a senior executive at the nation's flag carrier said. The flag carrier's stance clearly runs counter to that displayed by other domestic carriers, such as Jet Airways and SpiceJet, which have said recently that they may defer deliveries.

Like elsewhere, India's aviation sector is under increasing pressure from a slowing economy and high cost of jet fuel, which is amongst the highest in the world.

According to Jitender Bhargava, executive director, corporate communications, new capacity that will build up by December 2009 will be neutralized as leases for about a dozen planes in the fleet expire in that period. He told Dow Jones Newswires Tuesday that the carrier will not renew these leases and stick to the new orders instead.

Air India will take delivery of seven planes between July and December this year from manufacturers Airbus and Boeing. Another 30 planes, including two Boeing 787s, are due in November and December 2009, as part of the first batch from its 27-plane order of the twin aisle long-haul aircraft.

Domestic air travel recorded a 33% rise in 2007 to about 42.9 million passengers from 32.2 million a year earlier. Domestic passenger traffic growth has slumped to 9%, to 19.2 million passengers, during January-May this year, however.

Air India, now a merged entity combining the old Air India and Indian Airlines, has ordered a combined 111 planes from Boeing and Airbus. The orders include 68 aircraft from Boeing, worth more than $11 billion, and another $2.2 billion worth of 43 Airbus planes.

The spokesman conceded that the state-run carrier plans to cut some loss-making domestic flights, and would open only one new overseas route – to San Francisco.

Air India has a fleet of a 150 planes, of which 50 are leased, and flies to 120 destinations.