<ul><li>Last week, a cash-starved <keyword id="6358200" type="DOMAIN" weightage="20" keywordseo="jet-airways">Jet Airways</keyword> decided to temporarily suspend operations after its creditors refused to give into its requests for emergency funding. </li><li>In the immediate aftermath of the move, domestic <keyword id="6375796" type="UNKNOWN" weightage="20" keywordseo="airfares">airfares</keyword> surged by as much as 200% owing to <keyword id="6390515" type="UNKNOWN" weightage="20" keywordseo="capacity">capacity</keyword> constraints and the fact that a number of prime flight slots were now empty. </li><li>As they get Jet’s flight slots, domestic airlines have no choice but to increase the size of their fleets to meet their flight commitments.</li></ul> Last week, a cash-starved Jet Airways decided <a href="https://www.businessinsider.in/jet-airways-last-flight-tonight-will-increase-airline-ticket-cost/articleshow/68925023.cms">to temporarily suspend operations </a>after its creditors refused to give into its requests for emergency funding. In the immediate aftermath of the move, domestic airfares surged by <a href="https://timesofindia.indiatimes.com/city/pune/domestic-airfares-surge-up-to-200-after-jet-airways-crisis/articleshow/68972003.cms">as much as 200%</a> owing to capacity constraints and the fact that a number of prime flight slots were now empty. This only served to hurt consumers, as they were forced to book flights at high prices while waiting for refunds from cancelled flights. That was expected. But even before Jet’s grounding, the Directorate General of Civil <keyword id="31907" type="COMPANY" weightage="20" keywordseo="Aviation">Aviation</keyword> (DGCA) has asked domestic airlines to <a href="https://timesofindia.indiatimes.com/business/india-business/dgca-asks-airlines-to-rein-in-fares-as-jet-crisis-takes-a-toll/articleshow/68914262.cms">keep flight prices in check</a>, given that at least 11 routes had seen average fares increase by more than 10% year-on-year. As <a href="https://timesofindia.indiatimes.com/business/india-business/dgca-asks-airlines-to-rein-in-fares-as-jet-crisis-takes-a-toll/articleshow/68914262.cms">90% of Jet’s slots </a>were unused, the process of allocating them to other airlines was also underway. As they get more flight slots, domestic airlines have no choice but to increase the size of their fleets to meet their increased flight commitments. In fact, instead of a planned addition of 80 planes at domestic carriers, the number has recently been <a href="https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/150-new-planes-this-fiscal-to-fight-fare-turbulence/articleshow/68983278.cms?from=mdr">increased to 150</a> - a third of which will be added at market leader Indigo. <keyword id="2573" type="COMPANY" weightage="20" keywordseo="Air-India">Air India</keyword> is currently in the process of securing some planes <a href="https://www.financialexpress.com/industry/air-india-looks-at-leasing-some-boeing-737s-of-grounded-jet-airways/1554785/">that were leased to Jet</a> for both international and domestic routes, having written to the State Bank of India <a href="https://www.livemint.com/companies/news/air-india-keen-on-taking-5-grounded-jet-boeings-1555577250188.html">for permission to do so</a>. AirAsia is also reportedly <a href="https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/150-new-planes-this-fiscal-to-fight-fare-turbulence/articleshow/68983278.cms?from=mdr">adding 14 planes</a> this coming quarter. Meanwhile, both <keyword id="6358032" type="DOMAIN" weightage="20" keywordseo="SpiceJet">SpiceJet</keyword>, GoAir and Indigo have also moved to <a href="https://www.livemint.com/companies/news/jet-airways-crisis-spicejet-air-india-step-in-to-soften-blow-to-indian-aviation-industry-1555717072015.html">lease more planes and add more flights</a>. Spicejet alone has hired hundreds of Jet’s former employees. An estimated 20,000 employees were without work when the airline shut operations. Jet’s suspension is expected to last until the creditor-led bidding process for a majority stake in the airline is completed. However, if the bidding process fails to unearth a serious bidder - which is a possibility given the fact that Jet isn’t operational - the airline might have <a href="https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/jet-airways-crisis-lenders-keen-on-non-ibc-resolution-in-case-bidding-process-fails/articleshow/68974386.cms">to undergo liquidation proceedings</a>. SEE ALSO: <a href="https://www.businessinsider.in/jet-airways-last-flight-tonight-will-increase-airline-ticket-cost/articleshow/68925023.cms">Jet Airways might fly for the last time tonight and that's bad news for travellers</a> <a href="https://www.businessinsider.in/jet-needs-emergency-funding-of-4-billion-to-stay-airborne-until-a-buyer-swoops-in/articleshow/68915745.cms">Jet needs emergency funding of ₹4 billion to stay airborne until a buyer swoops in</a>

As Jet remains grounded, Indian airlines are increasing their fleets to rein in surging ticket prices

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/57855bd488e4a79f178b777f-1919/a321_wow_air.jpg" border="0" alt="Airbus A321neo WOW air" data-mce-source="Airbus" />AirbusA Wow Air Airbus A321neo.</div></div></div><ul class="summary-list"><li><a href="https://www.businessinsider.com/category/wow-air" target="_blank" rel="noopener">Wow</a><a href="https://www.businessinsider.com/category/wow-air" target="_blank" rel="noopener"> Air</a> is offering one-way flights from the US to Europe for as little as $49.</li><li>The discounted fare will be available on select flights from Boston, Detroit, Washington D.C., and New York to Reykjavik, Dublin, Brussels, Frankfurt, and London. </li><li>Only 1,000 seats will be available at the $49 price point. </li><li>The sale ends at midnight on January 18 or until the discount tickets sell out. </li></ul>Wow Air launched a week-long fare sale on Monday with one-way flights from the US to Europe for as little as $49.The Icelandic ultra-low-cost airline will offer the discount on select flights from Boston, Detroit, Washington D.C., and New York to Reykjavik, Dublin, Brussels, Frankfurt, and London. We are excited to offer our lowest price ever to <keyword id="6354692" type="UNKNOWN" weightage="60" keywordseo="Travel">travel</keyword>ers dreaming of a Eurotrip this year," Skúli Mogensen, founder and CEO of Wow Air, said in a statement. "At Wow Air, we are committed to making travel more affordable and accessible to all as traveling is a culturally enriching, enjoyable and enlivening experience."However, only 1,000 seats will be made available at the $49 price point and they are only available if booked as part of a round-trip reservation. The sale ends at midnight on Friday, January 18 or until the discount tickets sell out. Read more: <a href="https://www.businessinsider.com/airlines-with-least-delays-most-on-time-flights-2019-1" target="_blank" rel="noopener">These 20 airlines are the least likely to have delayed flights</a>.The sale fare is for flights between January 21 and March 11, 2019. The seven-year-old airline known for its brightly painted purple plane and rock bottom tickets has been struggling to find solid financial footing. In November, Wow Air failed to complete a merger with Icelandair in a deal that <a href="https://www.businessinsider.com/wow-air-acquired-by-rival-icelandair-2018-11" target="_blank" rel="noopener">valued the carrier at $18 million to $25 million</a>. Last month, the <a href="https://www.businessinsider.com/wow-air-lays-off-over-100-employees-2018-12" target="_blank" rel="noopener">airline announced the layoff of 111 employees</a>. In addition, it has also returned all of its leased widebody Airbus A330s jets used on flights to the West Coast of the United States. The airline also sold four Airbus A321 jets to Air Canada. The airline is <a href="https://wowair.is/investors/media/" target="_blank" rel="noopener">currently discussing investment opportunities</a> with private equity firm Indigo Partners which also owns low-cost carriers Frontier Airlines and JetSmart. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/jeep-wrangler-made-fiat-chrysler-automobiles-factory-2018-12">Go inside the Chrysler factory that makes Jeep Wranglers</a></h3> <div> <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/NRpW7GIN-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script> </div> </div>

Wow Air is offering $49 one-way flights from the US to Europe

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54439394eab8ead10ef4ef9a-1200-800/indigo-air.jpg" border="0" alt="indigo air">REUTERS/Vivek PrakashAn IndiGo Airlines A320 aircraft is parked on the tarmac at Rajiv Gandhi International Airport in Hyderabad March 7, 2012.</img></div></div></div>NEW DELHI/PARIS (Reuters) - Almost four years ago a handful of people gathered in Airbus sales chief John Leahy's spacious country house outside Toulouse and argued long into the evening over curry and cigars.
Last weekend they met up again at a Parisian hotel for more haggling, with breaks taken at a nearby cafe where the informality of old business friendships mingled with hard-nosed negotiations typical of the aircraft industry.
The sum total of money discussed over these meals? About $40 billion at catalogue prices, and the bill was for 430 jets, all sold to the same Indian airline -- IndiGo, the low-cost carrier which has grown to become the country's biggest airline in eight years of operating.
Represented according to insiders by co-founder Rakesh Gangwal and President Aditya Ghosh, IndiGo has now made aircraft industry history twice in four years -- each time by placing record orders for Airbus planes, including last Wednesday's announcement that it will buy 250 A320neo jets.
The largest order in India's aviation history is IndiGo's most aggressive bet yet that Indian air travel is on the cusp of a huge expansion, and that the model that made it the nation's only profitable carrier will keep working as competition intensifies.
"IndiGo is showing us the level of confidence it has in its own sustainability, in the long-term growth of aviation and in the future performance of the Indian economy," said Harsh Vardhan, chairman at Delhi-based Starair Consulting.
Airline industry executives are hoping India's weak economy will rebound under new Prime Minister Narendra Modi and that the government will press for cuts to jet fuel tax and build more airports, slashing costs and opening up new markets.
Higher disposable incomes, an expanding middle class and rapid urbanization have made India one of the world's fastest-growing domestic aviation markets, where passenger numbers are expected to grow by more than 75 percent in the next six years to exceed 217 million.
According to Airbus executive vice-president and the president of its India operations Kiran Rao, optimism about growth in Indian aircraft demand is rising.
But few airlines have translated that optimism into new orders on the scale of IndiGo's since most are losing money.
"People are too focused on India's negatives. IndiGo is aware of the challenges and it is adept at steering itself around them. That is how it became India's largest carrier," said one source familiar with the airline's thinking.
"There is, however, a great deal of optimism about the future within the airline and that comes right from the top."
Ghosh told Reuters last week India was a "highly underpenetrated market" and that a lot of the new planes would be for growth rather than replacing older aircraft.
<div class="KonaFilter image-container display-table"><div><div class="image"><img src="https://static-ssl.businessinsider.com/image/5443baf369beddff481c6f86-1011-654/screenshot 2014-10-19 09.20.22.png" border="0" alt="Screenshot 2014 10 19 09.20.22">REUTERS</img></div></div></div>
<h3>STAYING IN PROFIT</h3>
Despite more Indians flying, fierce competition and high costs have left airlines including SpiceJet, Jet Airways and state-run Air India losing cash fast. The sector will lose up to $1.4 billion more this financial year, according to consultancy CAPA.
Privately held, IndiGo does not disclose its full accounts but is the only major Indian carrier which says it is profitable. It reported a sixfold rise in net profit to 7.87 billion rupees ($128 million) in the 2012-13 financial year, and has since expanded its market share to about 32 percent.
Founded in 2006 by travel entrepreneur Rahul Bhatia and Gangwal, a former chief executive of U.S. Airways and an old hand in executing game-changing aircraft orders, IndiGo has relied almost entirely on the sale and leaseback model to fuel its growth.
IndiGo buys a single line of planes in bulk at discounts, and then sells them to leasing companies around the time they are delivered, leasing the planes back and retiring the aircraft within six years to avoid depreciation and maintenance costs.
This keeps capital costs low and its balance sheet light, and is a strategy some analysts say hands it up-front cash to meet operating costs and tips it into profitability as rivals succumb to losses.
"IndiGo is also a good customer and in a good cash flow position, which means that there is little chance of default. In India IndiGo is probably the best customer for lessors," said one person familiar with the leasing negotiations.
IndiGo denies that the sale and leaseback model is the reason it makes money, and instead points to an advertising budget which is less than 1 percent of revenues, the fast turnaround of its fleet and its high level of seat sales as a proportion of capacity compared with its rivals.
The airline says it will also stick to the standard low-cost operator's strategy of flying a single type of narrow body plane within India and to a handful of overseas destinations. 
<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5443bada6da811e41db5873a-1200-800/rtr2yyub.jpg" border="0" alt="An IndiGo Airlines A320 aircraft">REUTERS/Vivek PrakasAn IndiGo Airlines A320 aircraft is parked on the tarmac at Bengaluru International Airport in Bangalore March 7, 2012. </img></div></div></div>
<h3>COMPETITION AND AMBITION</h3>
IndiGo's ascent is not without its risks, however.
An end to the era of cheap borrowing to finance its plane orders would raise its costs, and should India's fragile economic recovery wilt IndiGo would be left facing delivery of 250 Airbus planes from 2018 that it would struggle to fill.
Increased competition in a notoriously cut-throat Indian market plagued by overcapacity could throw up the biggest hurdle to IndiGo's ambitions, analysts say.
Once-profitable airlines like Jet, which went from market leader in the 1990s to today's sprawling <keyword id="6356001" type="COMPANY" weightage="60" keywordseo="international">international</keyword> carrier, have turned loss-making in the last two years as fares fell faster than they could cut costs.
Meanwhile Malaysia-based budget carrier AirAsia launched its first Indian flight in June, bringing in an airline which manages to operate with one of the lowest unit costs per kilometer flown in the industry. AirAsia India did not respond to requests for comment on IndiGo.
"The biggest risk for IndiGo is how the competition behaves, whether AirAsia and others respond more aggressively now," said Starair's Vardhan.
(1 US dollar = 61.6200 Indian rupees)
(The story is refiled to fix spelling of additional reporter credit)
(With additional reporting by Siva Govindasamy in Singapore; Editing by Greg Mahlich)

Inside The $40 Billion Jet Buying Spree By India's Biggest Airline

<img class="gwt-Image" src="/photo/49322144.cms" /> The <a href="http://www.businessinsider.in/searchresult.cms?query=Indian+aviation+industry">Indian aviation industry</a> is going through testing times. So much that even new airline companies couldn’t infuse life in the market. Newer airlines came and failed to do well due to major financial and operational issues including delaying salaries, putting off aircraft induction, grounding planes and cancelling flights. 
 
If sources – including ex-employees – are to be believed, Chennai-based <a href="http://www.businessinsider.in/searchresult.cms?query=Premier+Airways">Premier Airways</a> has not paid it employees since last three months and is also waiting for an air-operator’s permit. 
 Another Bengaluru-based airline <keyword id="2773689" type="UNKNOWN" weightage="20" keywordseo="FLYeasy">Flyeasy</keyword> is also waiting for the permit and has delayed its employees’ salaries for two months. Not just this, but its head of sales and marketing, Mani Rayaprolu, head of sales and marketing also left the organization recently. 
 As published in an Economic Times report, apart from <keyword id="2906931" type="ORGANIZATION" weightage="20" keywordseo="Premier-Airways">Premier Airways</keyword> and Flyeasy, other south-based airlines are also facing issues varying from aircraft being grounded to mass flight cancellations. 
 Premier has also lost its 150 employees who preferred SpiceJet and IndiGo as better employers. The airline agreed to buy 40 <keyword id="3096133" type="UNKNOWN" weightage="20" keywordseo="A320-Neos">A320 Neos</keyword> from <keyword id="6356166" type="COMPANY" weightage="20" keywordseo="Airbus">Airbus</keyword> earlier this year, but hasn't been able to get <keyword id="6354335" type="CITY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> approval to import the planes. 
 
A top official, requesting anonymity said, "I don't think they have the money. I won't be surprised if the project is dead.” 
 
Simultaneously, ABC Aviation and Training Services owned Flyeasy plans to begin with five Embraer planes but the company had to cut it down to two and that too were had to be leased from Saudi Arabian national carrier flynas. Sources informed that the airline didn’t sent pilots and engineers to test-fly and check the aircraft, following which the lease would start. 
 
Both the airlines named here are without a fleet, losing people and more than that, they haven’t been even launched yet.

Indian domestic Airlines are going through their worst phase ever

<img class="gwt-Image" src="/photo/38489052.cms" /> India’s civil <keyword id="45911" type="UNKNOWN" weightage="100" keywordseo="Aviation-sector">aviation sector</keyword> has been going through turbulent times lately. During its boom period from 2004 to 2008, the sector was driven by high economic growth rates and rise in income of the salaried class which had come to enjoy huge disposable incomes. 
 
Then the global economic recession hit in the last quarter of the calendar year 2008. Travel numbers dropped significantly and pushed airlines to barely managing operating costs. Yet amidst the gloom and doom scenario where the most glamorous of them all, Kingfisher, has fallen, a new star is aiming to rise. 
 
A new market of small city middle class travellers Malaysian budget carrier <keyword id="6358246" type="COMPANY" weightage="100" keywordseo="AirAsia">AirAsia</keyword>, one of the most profitable low-cost airlines in the world, partnered with <keyword id="46894" type="PERSON" weightage="100" keywordseo="Tata-Sons">Tata Sons</keyword> and launched AirAsia India, which has been touted to bring in ultra low cost air travel to everyone in India who currently still travel by bus and trains. So who is the target traveller of AirAsia India? The vast majority of the Indian middle class which mostly avoids costly air travel. They include people like IT and sales executives travelling short distances between two nearby cities, teachers, doctors, engineers and small retail owners. But how will or can AirAsia tap this potentially huge customer base with existing low margins and high costs in the Indian aviation sector? 
 
Big time cost cutting to go cheap 
AirAsia India’s model is based on squeezing out every bit of time, energy and space from every other possible asset. AirAsia India is targeting fastest turnaround time for Indian aviation at less than 25 minutes. Turnaround time is defined as the time duration counted from the moment the plane lands till the moment the plane takes off from a particular airport. But high congestion in Indian airports, big ones in general, and especially during holiday and festival season makes turnaround times of even less than 30 minutes impossible. So, this will be a challenge that AirAsia will have to face for bigger airports. 
 
Again, intertwined with faster around time is its concept of more flying time for its aircraft per day and higher frequencies. This will serve smaller airports during the day which will be served by more number of flights by AirAsia. However, this would mean flights at odd hours like 5:30 in the morning to 11:30 at night which will be difficult at smaller airports where night flying facility is not up to the mark or not available. And larger airports’ congestion might not allow for such schedules. 
 
Then, on the personnel front, it is also going for cabin crews helping in loading and unloading from the baggage compartment and same crews will assist in removing stubs from boarding passes and prepare load sheets. Thus in this way, AirAsia is targeting an aircraft-to-manpower ratio of less than 1:100. Indigo achieved a ratio of 1:98 many years ago but that was because of economies of scale achieved through owning many planes. 
 
It is also going for point to point service without any tie ups with other airlines and travel companies. AirAsia India has its own website from where it provides all information and booking facility to its customers and travellers. This saves on costs of networking with other airlines and travel companies but takes away the advantage from travellers of being able to compare total flight expenses from different flight options on travel companies’ websites. 
 
Also, it aims to utilise every inch of space in the aircraft by packing as many seats as possible. So basically, there’s not much scope in terms of leg room or stretching your seat back. That is also one of the reasons why the airline has chosen smaller duration routes. 
 
Will consumers have to pay eventually? 
Finally, the real squeeze will be eventually from the consumers themselves but in a tricky way. The key here is targeting that segment of travellers who have to travel light for short distances – single-day or two-day business trips mostly over short distances. That’s why it is not refunding anything to travellers on cancellation of tickets. This is something that ‘no-frills’ airlines have been using across the globe in different ways. 
 
But in an evolving market like India, it will depend on how different segments of travellers take to the concept of going for reservations only in case of absolute certainty in travel plans. Companies paying for their employees’ travel will mostly not go for this option as corporate travel plans often change at the eleventh hour. 
 
They also did away with free check-in luggage of up to 15 kg but the Directorate General of Civil Aviation (DGCA) butted in and asked the airline to take it back. That was some relief for consumers. 
 
Polarised opinion 
Other airlines and industry experts are divided on the future of AirAsia India. On one hand, industry experts and corporate honchos from other airlines feel that since the biggest cost element for Indian airlines remains aviation turbine fuel, making up 50% of operating costs along with airport leasing charges, the tweaking of other elements will not make that much of a difference in the long run. 
 
On the other hand, while the airline has targeted a break-even in less than six months, perhaps a promotional gimmick at best, it doesn’t matter that much because of the Tata tag. The biggest and most respected business group in India will easily make lenders wait for the airline to break-even and anytime expansion is needed, the profitable parent airline AirAsia in Malaysia and Tata Sons in India can put more capital into it. 
 
In essence, AirAsia will have to go for a lot of planning, market research, high operational efficiency and revenue forecasting for different possible routes so as to ascertain the most profitable ones.

You Searched For "Indigo leased planes" and got 5 results

As Jet remains grounded, Indian airlines are increasing their fleets to rein in surging ticket prices

Dilsher Dhillon

Wow Air is offering $49 one-way flights from the US to Europe

Benjamin Zhang

Inside The $40 Billion Jet Buying Spree By India's Biggest Airline

Tommy Wilkes and Tim Hepher

Indian domestic Airlines are going through their worst phase ever

BI India Bureau

AirAsia India – Can It Survive In Turbulent Times?

Pallavi Srivastava