Kingfisher Airlines into sale and leaseback deal
Kingfisher Airlines entered into a sale and leaseback deal for two Airbus A-321 aircraft, reports Ranju Sarkar.india Updated: Nov 02, 2006 03:45 IST
Kingfisher Airlines, promoted by liquor maker United Breweries, entered into a sale and leaseback deal for two Airbus A-321 aircraft with aircraft leasing major Pegasus Aviation Finance, said the airline in a statement.
The airline, which posted a loss of Rs 240 crore for the year ended March 2006, would make a profit of around $400,000 from the deal, said sources close to the deal. The cash will come in handy, as the yields will remain under pressure.
The way a sale and leaseback deal works is: airlines book profits by selling aircraft to a leasing company, which leases the aircraft back to the airline. The basis of the deal is the demand for medium-range passenger jets like Airbus A-320 family or Boeing 737s.
Kingfisher will be first to fly the A-321 in India, which will complement its fleet of 10 Airbus A-320s and 3 Airbus A-319s. Powered by the IAE V-2500 engines, the A-321s will have 32 seats first class seats and 119 economy seats.
Pegasus will take ownership of the two A-321 aircraft upon delivery from Airbus, and Kingfisher will lease them from Pegasus, which has already leased out one Airbus A-320 aircraft to Kingfisher.
‘‘Given our growth and market share that we have achieved, I look forward to doing more business with fine partners such as Pegasus,’’ said Kingfisher’s CMD Vijay Mallya. Kingfisher is currently India's fourth largest Airline with a market share of 9.4 per cent.
‘‘We’re thrilled to be a part of the dynamic growth in India’s air transport system. These deliveries represent our fourth and fifth aircraft in India, and we’re excited about the market’s prospects,’’ said Peagus’ President & CEO Richard S Wiley.
Meanwhile, Kingfisher has entered into an interline deal with Delta Airlines, which is starting a non-stop flight from New York to Mumbai. The deal will allow Kingfisher to carry Delta’s passengers on their onward journey to other Indian cities. Starting December 1, it will start new flights leaving Mumbai at 0245 hours for Bangalore, Chennai, Ahmedabad and Delhi. These new flights will allow passengers arriving at the Mumbai international airport to reach their final destinations in India without having to transfer to the domestic terminals or having to wait long hours to connect to flights to their final destinations, said Kingfisher in a statement.