Naresh Goyal-promoted Jet Airways and Abu Dhabi-based partner Etihad Airways are moving fast to monetise the synergies between the two airlines even as they await the Cabinet's clearance for their stake-sale deal.
After agreeing to have common interiors for their future Boeing 787 fleet, Etihad has now agreed to lease Jet's Airbus A330-300, which will help the Indian airline save $50-55 million (Rs 320 crore-350 crore) annually in leasing costs. The aircraft being sub-leased to Etihad was out of service for the last two quarters as Jet pulled out of some unprofitable routes.
Jet Airways has five more such planes parked in India and a similar sub-leasing deal is likely to be signed for at least two more planes with Etihad. “The overall benefit could be somewhere close to $100-150 million in leasing cost-savings per year if the deal for two more planes works out,” said a person in the know of the development. “There are two more airlines interested in sub-leasing them from Jet, and the deal should be finalised by the end of the second quarter.”
Etihad's decision to sub-lease the wide-bodied Airbus A330-300 from Jet Airways came days after the foreign investment promotion board cleared the stake-sale deal between the two airlines, with some riders. The FIPB approval came on July 29 and the sub-leasing deal was agreed upon on August 5.
The sub-leasing of the aircraft comes as immediate benefit for Jet Airways, which has suffered from the additional costs of planes on the ground and rising lease rentals over the past two quarters. In the first quarter of the fiscal 2013-14, Jet Airways incurred a one-time cost of around R125 crore as aircraft remained on ground, and slumped to a standalone net loss of R355 crore.
Similarly, in the fourth quarter of the 2012-13 fiscal, Jet Airways incurred a one-time cost of R90 crore and ended up with a standalone net loss of R495.63 crore for the quarter.
Besides helping Jet Airways cut