Saturday, November 11, 2006

Leased aircraft rent up 20%

Mumbai: Airlines are facing a new cost crunch due to rising aircraft lease rentals, which have gone up by 20 per cent due to shortages in the international market.
Rentals for aircraft with a basic configuration have shot up by 33 per cent to reach $400,000 a month from $300,000 a month for popular models such as Airbus A320 and Boeing B737. Lease rentals for higher configuration (for full service airlines) are as high as $550,000.
There is a shortage of bigger jets following the delay in the A380 production schedule, an Air-India executive said.
Aviation industry experts said lease rentals were moving northwards mainly due to an increase in the London Interbank Offered Rate (Libor).
Libor is hovering around 5.12-5.25 per cent compared with 2.50-2.75 in 2004,? they added. The aircraft shortage is mainly because of a boom in aviation, resurgence of tourism, and a high rate of economic growth in countries like India, China and South-East Asian countries.
11/11/06 Business Standard
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