Air India signs deal to replace 34 old engines

Air India has signed a sale and leaseback agreement with US-based Willis Lease Finance Corp for 34 engines to power 17 aircraft of the Airbus A320 family.

Under the agreement, Willis Lease will purchase from Air India 34 CFM56-5B engines to power 13 Airbus A321 aircraft and 4 Airbus A320 airplanes and lease them back to the airline. Willis Lease will also provide replacement and standby spare engines to Air India as per the agreement.

The agreement will help the carrier save on maintenance costs.

Florida-based Willis Lease is a global aviation finance company, specializing in the lease, finance and management of aircraft, spare commercial aircraft engines and auxiliary power units.

"The transaction with Willis would enable the airline to eliminate the maintenance burden and fully de-risk itself from the maintenance cost uncertainty associated with the engines which were not covered under any “Power By The Hour” programme with the engine makers.Under “Power By The Hour”, a certain amount is paid to the engine maker for each hour the aircraft flies, and this amount is used for future maintenance requirements. This transaction will allow Air India to improve fleet reliability, reduce cost, and optimise cash flows."Nipun Aggarwal, Air India’s Chief Commercial Officer

Willis Lease will also have an in-country team to coordinate and manage the programme and all logistics and transportation involved.

Things are moving at a swift pace at Air India. Grounded airplanes are being prepped for operations again, new aircraft orders are on the way, and cost-effective practices are becoming the norm.

Air India plans to have a fleet of 143 planes by end of 2023.

Air India has 113 planes in its fleet currently. Its narrow-body fleet comprises 70 aircraft, of which 54 are in service. The rest of the existing narrow-body fleet and some of the wide-body fleet which was grounded will progressively return to service by early 2023, according to Air India.

ALSO READ - Air India to revamp its fleet by leasing 30 aircraft in the upcoming months

The airline has also signed leases and letters of intent for inducting 5 wide-body Boeing and 25 Airbus narrow-body planes over the next 15 months. The planes being leased include 21 Airbus A320 neos, 4 Airbus A321 neos and 5 Boeing B777-200LRs.

ALSO READ - Air India unveils Vihaan – a comprehensive 5-year transformation plan

The highly classified, next-generation stealth bomber, the B-21 Raider, will finally come out of the shadows thanks to an official deployment planned for the first week of December by the US Air Force.

Representative | UPI.com

The B-21 Raider will be unveiled by Northrop Grumman Corporation and the U.S. Air Force in the first week of December at the company's Palmdale, California, at the same facility used during the 1980s and 1990s for Northrop B-2 production.

The B-21 is the most advanced military aircraft ever built and is a product of pioneering innovation and technological excellence. The Raider showcases the dedication and skills of the thousands of people working every day to deliver this aircraftsaid Doug Young, sector vice president and general manager, Northrop Grumman Aeronautics Systems

It will be an advanced, extremely long-range, massive, heavy-payload, stealth intercontinental strategic bomber for the USAF as part of the Long Range Strike Bomber (LRS-B) programme, capable of delivering conventional and nuclear weapons.

Representative | Source

Since the contract was awarded in 2015, Northrop Grumman has put together a team from across the country to develop, test, and construct the most cutting-edge strike aircraft ever. The B-21 is the result of cutting-edge stealth technology combined with Northrop Grumman's innovative digital engineering methodologies and modern manufacturing methods.

The Aviationist

In 2015, Northrop Grumman won the B-21 contract over a Boeing-Lockheed Martin collaboration. Six B-21s are currently being produced, according to information released so far by Northrop, with the initial flight set for 2023.

The actual timing of the first flight will be based on ground test outcomes. The first B-21 was moved to a calibration facility in March 2022.

Northrop Grumman is proud of our partnership with the U.S. Air Force as we deliver the B-21 Raider, a sixth-generation aircraft optimized for operations in highly contested environmentssaid Tom Jones, corporate vice president and president, Northrop Grumman Aeronautics Systems

An invitation-only event will be held for the reveal at Northrop Grumman's Palmdale facility.

https://www.youtube.com/watch?v=7DRDdaH1iMQ

In fiscal 2023, the Air Force sought $5 billion for the B-21, including $1.7 billion for procurement financing, though it won't say how many bombers it would purchase. The Air Force intends to purchase at least 100 B-21s in all. The estimated cost of each B-21 in FY10 currency is $550 million.

It will eventually replace the United States' current fleets of Boeing B-52 Stratofortress, Northrop Grumman B-2 Spirit, and Rockwell B-1 Lancer bombers.

ALSO READ - Is China teasing the US with its “undercover” Stealth Bomber?

SOURCE(s)

COVER: 19FORTYFIVE

The National Company Law Tribunal has issued a notice to SpiceJet on an insolvency plea and directed the domestic budget carrier to respond to it within two weeks.

The NCLT issued the notice to SpiceJet based on an application filed by one of the operational creditors of the airlines -- Acres Buildwell Pvt Ltd. The company claims that outstanding dues to the tune of INR 3.25 crores are owed to it by SpiceJet.

The NCLT, in an order passed on September 2, had granted SpiceJet two weeks to file its reply on the plea as to why insolvency resolution proceedings should not be initiated against it. The case is likely to be heard next on September 30.

ALSO READ - SpiceJet settles financial dispute with Credit Suisse AG

SpiceJet receives notice from NCLT regarding an insolvency claim

Earlier this year, SpiceJet had reached a settlement with Credit Suisse AG which had sought the winding up of the airline over unpaid dues. The airline had reached an in-principle settlement with Credit Suisse AG over pending dues of USD 24 million.

On January 11, a division bench of the Madras High Court upheld a single-judge order passed on December 7, 2021, which directed the liquidation of the private airline and asked the official liquidator to take over the airline's assets. On January 28, the Supreme Court halted the winding up of the airline and asked it to clear its dues at the earliest.

ALSO READ - Spicejet looking for a “knight in shining armour” to help with financial distress

SpiceJet had recently informed that it is in talks with bankers to raise as much as USD 200 million in fresh capital and that promoter Ajay Singh, who owns a nearly 60% stake in the airline, has been approached by a ‘big Middle Eastern airline’ and a big Indian business conglomerate for a stake in the airline.

Earlier this year, SpiceJet had reached a settlement with Credit Suisse AG which had sought the winding up of the airline over unpaid dues.

ALSO READ - SpiceJet in active discussion with a Middle Eastern carrier for a possible stake sale

Further, the airline has also received approval for a loan under the central government's Emergency Credit Line Guarantee Scheme (ECLGS). It will reportedly receive around INR 225 crore under the scheme.

ALSO READ - SpiceJet set to receive funds through ECGLS, an extension of up to 3 months for AGM’22

SpiceJet reported a net loss of INR 789 crore for the quarter ending June 30, 2022, as compared to a net loss of INR 729 crore in the quarter ending June 30, 2021, as business was severely impacted by record high fuel prices and a depreciating rupee.

ALSO READ - Worst nightmare of SpiceJet – From financial losses widening to the CFO resigning to non-payment of salaries

Akasa Air grounded a Boeing B737-800 MAX aircraft on Tuesday, September 20 after a leakage in an engine fuel pump, aviation industry sources said. The airline cancelled a couple of flights in the last two days due to the grounded plane, which has registration code VT-YAC.

The new carrier has four planes in its fleet and is currently operating with three planes. It is looking to source spare parts to repair the engine fuel pump of VT-YAC. An official at the Directorate General of Civil Aviation (DGCA) confirmed the grounding of VT-YAC due to an "unserviceable engine fuel pump".

ALSO READ – Big plane order may be placed by Akasa Air in the next 18 months

ALSO READ - Akasa Air to expand operations with 150 weekly flights

Akasa Air grounds B737 MAX after a leakage in an engine fuel pump

Akasa Air has earlier said that its fleet size will go up to 18 aircraft -- all B737 MAX -- by March 2023. By March 2027, the airline plans to have 72 B737 MAX aircraft in its fleet. Akasa Air also expects to operate more than 150 weekly flights by the end of September. 

ALSO READ - Akasa Air had a 53% occupancy rate in its first month of operations

Akasa Air, which operated its first commercial flight on August 7, filled 52.9% of seats up to August 31. The DGCA data showed that Akasa Air carried 24,000 passengers on its flights in August, which gave it a 0.2% market share. IndiGo is the market leader as it flew 5.83 million passengers domestically, recording a market share of 57.7%.

ALSO READ - Akasa Air set to launch flights from the national capital

The airline operates flights between five cities across the country. From October 7, it plans to start operating flights on Delhi-Bengaluru and Delhi-Ahmedabad routes.

Akasa Air, which operated its first commercial flight on August 7, filled 52.9% of seats up to August 31.(Image Credit - Aerowanderer)

ALSO READ - Akasa Air leads in pay hikes for pilots; raises salaries by 60%

Akasa Air is also leading on pay hikes for pilots, marking a reversal of the pandemic-era aviation squeeze that saw salary cuts and job losses globally. This is likely to set off salary increases at other carriers to ensure they have enough pilots as air traffic recovers amid fleet expansion and Gulf carriers embarking on a hiring spree.

Akasa raised pilot pay by an average of 60% — captains will start at INR 4.5 lakh a month and first officers at INR 1.8 lakh — from October. This is against INR 2.79 lakh and INR 1.11 lakh, respectively, at present.

Depending on experience and hours flown, the pay could be higher. At the maximum limit of 70 hours per month, a captain can earn INR 8 lakh, about 28% more than INR 6.25 lakh now, said the people cited above.

(With Inputs from Business Standard)

Budget carrier SpiceJet has announced a 20% salary hike for senior pilots from October on Thursday, September 22. This follows last month's 6% hike in salaries. Moreover, the company will be depositing the TDS of all employees in the next two-three weeks. And, a significant portion of the PF will also be credited.

ALSO READ - Struggling to-Survive SpiceJet allegedly not depositing PF in employee accounts

SpiceJet received the first tranche of the Emergency Credit Line Guarantee Scheme (ECLGS) payment of around INR 125 crore last week. According to an internal mail to all the pilots, senior VP, Gurcharan Arora said that Spicejet has received the approval for a loan under the government's ECLGS scheme.

ALSO READ - SpiceJet set to receive funds through ECGLS, an extension of up to 3 months for AGM’22

"The first tranche of the payment has already been received and the second trancher is expected very soon. Our management is working to raise an additional USD 200 million.Keeping with our commitment of increasing salaries in a calibrated manner as our business improves, the salary for the month of October will see an increase of around 20% for our captains and senior first officers."Captain Gurcharan Arora, SVP - Flight Operations, SpiceJet

The mail also talked about the resumption of normalcy in the aviation sector and said that the airline is flying towards growth and sustainability.

ALSO READ - SpiceJet to send 80 Captains on LWP amid financial instability

The Gurugram-headquartered airline recently decided to place certain pilots on leave without pay (LWP) for three months, as a temporary measure to rationalise costs.

SpiceJet to increase 20% salary of senior pilots from October

SpiceJet said the measure, which is in line with the company's policy of not retrenching any employee which the airline steadfastly followed even during the COVID pandemic, will help rationalize the pilot strength vis-a-vis the aircraft fleet.

The airline said it had inducted more than 30 aircraft in 2019 following the grounding of the Boeing 737 MAX aircraft. The airline had continued with its planned pilot induction programme in the hope that the MAX would be back in service soon. However, the prolonged grounding of the MAX fleet resulted in a large number of excess pilots at SpiceJet.

ALSO READ – Cash-strapped SpiceJet plans to take delivery of 7 Boeing 737 Max

"We will be inducting MAX aircraft shortly and these pilots will be back in service as the induction begins. During the LWP period, pilots will remain eligible for all other employee benefits as applicable that is all opted insurance benefits and employee leave travel."SpiceJet

ALSO READ -DGCA extends the 50% cap on SpiceJet flight operations; keeps it under enhanced surveillance

Meanwhile, India's aviation regulator, the Directorate General of Civil Aviation (DGCA) on Wednesday, September 21 extended the cap on SpiceJet's operating capacity till October 29. In the order, the DGCA observed that the extension has been given on a review of the safety performance of SpiceJet.

It said that the review has shown an appreciable reduction in the number of safety incidents, however, as a matter of abundant caution, the restriction imposed shall continue to be in force till the end of the Summer schedule on October 29.

SpiceJet received the first tranche of the Emergency Credit Line Guarantee Scheme (ECLGS) payment of around INR 125 crore last week.

The order said that any increase in the number of departures beyond 50% of the total number of departures approved under the Summer Schedule 2022, during the period, shall be subject to the airline demonstrating to the satisfaction of the DGCA that it has sufficient technical support and financial resource to safely and efficiently undertake such enhanced capacity.

ALSO READ - DGCA orders SpiceJet to operate only 50% of approved flights

On July 27, DGCA ordered the airline to operate only 50% of its flights for eight weeks. SpiceJet incurred net losses of INR 316 crore, INR 934 crore, INR 998 crore and INR 1,725 crore in FY19, FY20, FY21, and FY22.

ALSO READ - Worst nightmare of SpiceJet – From financial losses widening to the CFO resigning to non-payment of salaries

DGCA on September 21 extended the cap on SpiceJet's operating capacity till October 29.

SpiceJet had earlier reported a net loss of INR 789 crore (INR 420 crore, excluding forex adjustment) for the quarter ending June 30, 2022, as compared to a net loss of INR 729 crore in the quarter ending 30 June 2021 as the business was severely impacted by record high fuel prices and a depreciating Rupee.

ALSO READ - Spicejet looking for a “knight in shining armour” to help with financial distress

The budget carrier is also said to be in talks with potential investors for a likely stake sale. SpiceJet's promoter Ajay Sigh and his family hold a 59.4% stake in the airline.

ALSO READ - SpiceJet in active discussion with a Middle Eastern carrier for a possible stake sale

It may be noteworthy that India's top airlines have still not restored the salaries of their employees to pre-COVID levels, citing a rise in fuel costs and limited domestic passenger operations.

India's top airlines have still not restored the salaries of their employees to pre-COVID levels

ALSO READ – IndiGo reinstates pilots and crew salaries by 8% from August 1

While, IndiGo is expected to restore salaries of its pilots, cabin crew, and ground handling staff to pre-COVID levels by September, SpiceJet's employees have been struggling with delayed payments.

ALSO READ - Indian carriers suffering a scarcity of senior pilots

Demand for senior pilots has increased as new carrier Akasa Air and revamped Jet Airways are willing to pay high salaries to hire them.

ALSO READ – Akasa Air leads in pay hikes for pilots; raises salaries by 60%

Despite the entry of airlines like Akasa Air and Jet Airways into the Indian aviation space, salaries and jobs of aviation personnel are not expected to rise for the next few years.

Tata Sons, the controlling entity of Air India, Vistara and AirAsia India, is looking to merge the three carriers under a unified Air India banner. To make it work, the Tatas are likely to offer Singapore Airlines (SIA), its joint venture partner in Vistara, a stake in Air India.

The stake offer has been accepted “in-principal” by SIA, which holds a 49% share in Vistara parent Tata SIA Airlines, an ET report on September 23 quoted top executives as saying. Discussions are on between N Chandrasekaran, chairman of both the Tata Group and Air India, and SIA’s executives.

N Chandrasekaran, Tata Sons chairman, had earlier stated that the group's airline businesses are operating on thin margins, and must be consolidated to ensure operational efficiencies and keep control of costs.

A stake in Air India may be offered to Singapore Airlines for the AI-Vistara merger

ALSO READ - The merger of Air India-Vistara to have clarity soon

Tata Sons and SIA did not respond to queries, the report said. Sources, however, said while SIA could agree to the merge, any financial infusion into Air India was unlikely as the airline is focused on getting its business back on track.

Earlier this year, Singapore Airlines had asked the Tatas to wait for some time before taking any decisions about the merger. Both the Tatas and SIA have discussed such possibilities, and SIA had reportedly even agreed to join the Tata bid for Air India but, because of the pandemic, decided to back out.

ALSO READ - Air India to concentrate on expansion of its US routes while SIA is open to a Vistara-Air India merger

Earlier this week, it was reported that the Tata Group had started an exercise to evaluate options to consolidate AirAsia India and Vistara under Air India. The goal is to bring operational synergies among the three airlines under its umbrella.

If the Air India-Vistara merger goes through, it will make the second-largest airline in the country, behind IndiGo.

If the Air India-Vistara merger goes through, it will make the second-largest airline in the country, behind IndiGo. The Tata Group is also merging the other airline in its fold, AirAsia India, with Air India Express, Air India's no-frills brand that flies primarily to West Asian and Southeast Asian destinations.

The merger proposal received the Competition Commission of India’s nod in June. Tata Sons holds a majority 83.67% stake in AirAsia India. Its holding in Vistara stands at 51%.

ALSO READ - Air India retains Capt R S Sandhu as Chief of Operations

Air India CEO and MD Campbell Wilson have set up a team under the airline's director of operations RS Sandhu to conduct the evaluation and submit a plan within one year. The plan is to achieve consolidation of AirAsia India into Air India Express over one year, while also targeting to bring all of the group's airline businesses under the Air India umbrella by 2024.

The merger of Air India Express and AirAsia India will start with integrating information technology and passenger booking systems

ALSO READ - Vistara may merge with Air India, a decision expected by end of 2023

Air India, which has been the national carrier for several decades, also enjoys an excellent recall value with travellers in India and overseas. With Vistara and AirAsia having recently commenced international operations, using the brand name 'Air India' would most certainly benefit them.

ALSO READ - Air India gets CCI’s approval to acquire the entire stake in AirAsia India

Sources have said that the merger of Air India Express and AirAsia India will start with integrating information technology and passenger booking systems. The Air India Express system is likely to be moved to AirAsia India’s system, which is said to be better in all aspects. Issues like cabin crew dress and branding are still being discussed at various levels.

ALSO READ - Air India unveils Vihaan – a comprehensive 5-year transformation plan