With the Indian aviation sector continuing to emerge as a major world market, it has been reported that the Jalan-Kalrock consortium is planning to order at least 200 aircraft for Jet Airways.
Jalan-Kalrock is the consortium which won the bid to revive Jet Airways – an Indian airline that suspended operations in April 2019 due to financial difficulties.
The consortium consists of UK-based entrepreneur Kalrock Capital and Jalan Group, an Indian conglomerate with interests in several industries.
The consortium had proposed to invest Rs 1,000 crore (approximately $135 million) in the airline and plans to operate it as a full-service carrier.
As part of its revival plan, Jalan-Kalrock aims to re-employ a significant number of Jet Airways’ former employees, including pilots, cabin crew, and ground staff. The consortium also plans to lease a fleet of narrow-body aircraft to operate domestic and international flights
Acquisition of 200 aircraft
According to local news source The Hindustan Times, the consortium’s recent plan for acquisition of 200 aircraft comes after the National Company Law Tribunal (NCLT) declined to halt the ownership transfer as requested by the lender.
According to the news source, two people familiar with the development have suggested that an official announcement of the order may come around June this year.
“Jalan-Kalrock is in talks with aircraft OEMs (original equipment manufacturers) to place an order of at least 200 planes of a mix of small, medium, and large narrow body jets at the Paris airshow in June for their growth plan for five years,” one person was reported as stating.
The Indian aviation sector
India’s aviation industry has experienced remarkable growth in recent years, driven by a surge in passenger traffic, increasing economic growth, and a growing middle class.
According to the India Brand Equity Foundation (IBEF), India is currently the 7th largest civil aviation market in the world and is expected to become the third-largest civil aviation market within the next 10 years.
India has become the third largest domestic aviation market in the world and is expected to overtake UK to become the third largest air passenger market by 2024.
In recent years, the Indian government introduced several initiatives to boost the aviation sector, such as the UDAN (Ude Desh ka Aam Nagrik) scheme, which aims to increase connectivity to Tier-II and Tier-III cities in the country. This has resulted in the emergence of several new airlines in India, including low-cost carriers such as IndiGo, SpiceJet, and GoAir.
According to the India Brand Equity Foundation (IBEF), India is currently the 7th largest civil aviation market in the world and is expected to become the third-largest civil aviation market within the next 10 years. India has become the third largest domestic aviation market in the world and is expected to overtake UK to become the third largest air passenger* market by 2024.
The civil aviation industry in India is emerging as one of the fastest growing industries in the country during the last three years.
Domestic traffic contributes around 69% of the total airline traffic in South Asia and India’s airport capacity is expected to handle 1 billion trips annually by 2023.
Recent bulk acquisitions
IBEF notes that Indian aviation industry has recovered fully from the Covid-19 pandemic shock as indicated by the air traffic movement which stood at 613,566 in the first quarter of FY 2022-23, compared to 300,405 in the same period last year, an increase of 104.24%.
As demand rebounds and the Indian market sector continues to emerge globally, airlines have moved to significantly bolster their fleets to capitalise on growth.
The news of the reported Jet Airways acquisition follows recent news of Tata Group’s Air India landmark bulk purchase of a mix of Boeing and Airbus narrowbody and widebody aircraft.
This was followed by the announcement of low-cost carrier IndiGo’s negotiations with OEM’s for approximately 500 aircraft.
