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SpiceJet bags rights to operate India-US flights

SpiceJet will operate on the India-US route as per terms of Air Services Agreement between the two countries
Jul 23, 2020 / 11:05 AM IST

Domestic carrier SpiceJet may have taken an early lead among private airlines to restart international operations, after getting designated as a scheduled airline to operate on agreed routes between India and the United States.

SpiceJet will operate on the India-US route as per terms of Air Services Agreement between the two countries.

"This designation would help us plan for our international expansion in a much better and calibrated manner," Ajay Singh, Chairman & Managing Director, said in a statement.

Till now, Air India was the only local carrier to operate between India and the US, through the Vande Bharat Mission to repatriate Indian citizens. In fact, this will be the first time after Jet Airways got grounded in April 2019, that a private airline from India will operate flights to the US.

"This is to inform you that in terms of the Air Services Agreement between the Government of India and the Government of the United States of America, SpiceJet has been designated as Indian scheduled carrier to operate on agreed services between India and the USA. This is for dissemination to all stakeholders," SpiceJet said in its statement to the exchanges on July 23.

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Commercial international flights from India have been halted since March 2020, when the country-wide lockdown was announced. Domestic flights resumed from June 2020 with passenger limitations and social distancing norms in place.

India has in the meantime operated repatriation flights since May, to bring home citizens stuck in other countries due to the coronavirus pandemic.

According to the Civil Aviation Ministry, 2,526 repatriation flights were operated under the Vande Bharat Mission till July 21, carrying over 3.4 lakh passengers. Of these, 1,262 were inbound flights carrying 2.3 lakh passengers and 1,264 were outbound flights with over 1 lakh fliers.

Wet lease

It is yet unclear which aircraft SpiceJet will use to fly to the US. Until COVID-19 struck, the airline was operating to short haul international destinations in the Middle East and South East Asia.

For the US, it will need a long haul, wide body aircraft. Though SpiceJet had taken a A330 aircraft from Oman on wet-lease, it is not clear if it will use this plane to fly to the US. A wet-lease is when the lessee is also provided with crew, insurance and maintenance, along with the leased plane.

Industry observers said that the airline could use the A330 for US flights, only if it can take an interim fuelling stop. "With payload restrictions, it can fly to very few destinations in the US. In all likelihood, it may need a technical stop in Europe," said a senior executive from the industry.

Senior executives point out that Oman Air also has the Boeing 787-9 Dreamliner that can fly to the US, from India.

"If it's a long term wet lease, of more than 60 days, then the airline from whom SpiceJet has leased, will have to get approval from the economic authority and safety authority from the USA," said Nitin Sarin, Managing Partner of Sarin & Co, which specialises in aviation law.

"Wet-lease is a good way to go about it, terms will be very attractive given idle aircraft and crew," Sanjiv Kapoor, Former CSCO, Vistara and ex COO, SpiceJet, said on Twitter. "India-US repatriation flights were a money-spinner for Air India while they were the only ones carrying pax both directions. At those average fares, these were possibly the most lucrative flights in history for them," added the industry veteran.

At the same time, he sounded out that supply was increasing on the route. Even as Air India increased flights on the routes to the US, United Airlines has also started operating to India.

Among other Indian airlines, IndiGo is expected to soon join these airlines, with the country's largest airline also getting wide body aircraft on wet lease.

Vistara, which already has a Boeing 787-9 in its fleet, is also looking to start flights to Europe and the US.

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Moneycontrol News
first published: Jul 23, 2020 11:05 am
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