Tata Group-owned Air India on Thursday signed an agreement with Florida-based Willis Lease Finance to sell 34 old engines and lease their new replacement to reduce maintenance costs and avoid unpredictable service calls.
The 34 old CFM56-5B engines power Air India’s four A320ceo aircraft and 13 A321ceo aircraft. Air India placed the order for these 17 aircraft with European aircraft manufacturer Airbus in 2006 and they were delivered to the then national carrier between 2008 and 2010.
Air India’s Chief Commercial Officer (CCO) Nipun Aggarwal said the deal with Willis would allow the airline to eliminate maintenance overhead and completely free itself from the uncertainty of maintenance costs associated with the engines, which are not included under “Power By The Hour “fall” program with the engine manufacturers.
With Power By The Hour, a certain amount is paid to the engine manufacturer for every hour the aircraft is flown, which is used for future maintenance needs.
“This transaction will allow Air India to improve fleet reliability, reduce costs and optimize cash flow,” Aggarwal said.
According to the agreement signed between Air India and Willis, the lessor will purchase the 34 engines from the airline and provide “spare and standby spare engines, allowing Air India to avoid potentially costly and unpredictable workshop visits on engines powering a changing fleet of aircraft”.
ALSO READ: Air India Extends Validity of Frequent Flyer Points to March 31, 2023
Willis will also have a team in the country to coordinate and manage the entire program and all related logistics and transportation work, he added.
Air India currently has 113 aircraft in its fleet. The narrow body fleet comprises 70 aircraft, of which 54 are in service. The widebody fleet includes 43 aircraft, 33 of which are operational. The remainder of the existing narrow-body fleet and the wide-body fleet will gradually return to service by early 2023, according to Air India.
A widebody aircraft like the B777-200LR has a larger fuel tank which allows it to fly longer routes like India-USA routes. Narrow-body aircraft such as the A320ceo and A320neo have smaller fuel tanks.
Earlier this month Air India announced it had leased 30 aircraft – 21 A320neo, four A321neo and five B777-200LR – to expand its operations. These 30 leased aircraft will be delivered to the airline by December 2023.
The airline plans to have a fleet of 143 aircraft by the end of 2023. After Tata Group won the bid to purchase Air India on October 8, Tata Group took control of the airline on January 27.
