Now that air travel is coming back to boom, airlines would look to go all out particularly in this festive season. On that note, Indian airlines are not ready to sit back and wait for the delivery of new aircraft. Instead, they are wet leasing planes to shore up capacity.
A slowdown within the supply of recent aircraft is forcing Indian airlines to wet lease planes to extend capability for the upcoming winter schedule.
A wet lease is a leasing arrangement whereby one airline (the lessor) provides an aircraft, complete crew, maintenance, and insurance (ACMI) to another airline or other type of business acting as a broker of air travel (the lessee), which pays by hours operated.
Airlines often turn to wet leasing when they want to ensure smooth operations during peak times, to deal with unexpected delays or maintenance, or as a means of testing new routes. Wet lease aircraft also serve as a means of reducing service disruption in the event of unforeseen situations such as a lack of available crew or technical faults.
Among Indian carriers – IndiGo, which operates narrow-body planes like the A320, has signed a deal to wet lease up to three Boeing 777 aircraft to push capacity on international routes. IndiGo particularly had to make this move as it was forced to ground around 30 aircraft as supply of spare engines by US-based Pratt & Whitney has fallen behind schedule by at least two months.
By making use of wet leasing, airlines are able to increase capacity and generate revenues and cash while demand for travel is high.
Wet leased aircraft allow airlines to experiment with opening up new routes which they believe to be commercially viable without the long term commitment of adding to the fleet.