The recent bankruptcy of four global airlines in the US and Hong Kong has turned out to be a bonanza for Indian private carriers looking for aircraft at low prices and experienced pilots.
Low fares, high capital costs and high pilot salaries have driven most Indian carriers into the red. The bankruptcy cases abroad, industry insiders said, are a good opportunity for them to reduce their losses with some inexpensive acquisitions.
GoAir is negotiating to acquire around 20 Airbus aircraft from these airlines at 20 per cent below listed rates. The Wadia family-promoted carrier is also looking to buy the slots for new aircraft ordered by the bankrupt carriers.
Budget carrier SpiceJet has decided to hire at least ten flight commanders from these airlines, who suddenly find themselves with no work to do.
Over the last two months, three US airlines - Skybus, Aloha and ATA - and Hong Kong-based Oasis have gone bankrupt and downed shutters on their operations. Another US carrier, Frontier, is learnt to have recently filed for bankruptcy. Most of them are no-frills low-cost carriers.
The four bankrupt carriers have close to 60 aircraft between themselves. Apart from that, Skybus Airlines had placed an order for 65 Airbus aircraft at a list price of $4.3 billion. With the airlines under liquidation, all these aircraft will be available in the market for sale at a discount.
"This will lead to excess supply in the market at a time when most international airlines have already placed their aircraft orders till 2012 and the current demand is low. Hence, these aircraft can be bought at a good bargain price," said an industry expert.
"As a part of our long-term strategy, we have been looking at expanding our current fleet to 40 aircraft," GoAir CFO GP Gupta said, adding: "We have been waiting for the right time to explore the opportunity to acquire 20 more aircraft in addition to our existing order of 20 aircraft." The carrier currently has a fleet of six aircraft.
SpiceJet Chairman Siddhanta Sharma said this was a good opportunity to grab some experienced commanders. "We expect that 50-60 pilots might be available (from the ones which are closing down), of which we plan to induct ten. At a time when the industry is so short of experienced commanders, a good supply of these pilots from any source is always welcome," said Sharma.
Company executives said that at a time when pilot salaries are shooting through the roof, it might be possible to induct these pilots at contracts less than their usual salaries.
