Tigerair has agreed to sub-lease 12 of its unused aircraft to Indian low-cost carrier, IndiGo, in an effort to “right-size” its fleet.
The 12 Airbus A320 aircraft were formerly operated by the now-defunct Indonesian carrier, Tigerair Mandala, and Tigerair Philippines, which was sold to Cebu Pacific earlier this year.
The aircraft were left surplus to requirements following the reduction of the group’s operations, so Tigerair has decided to try to make some money back from the jets by leasing them out.
As such, the 12 A320s will be sub-leased to IndiGo for up to four years. Eleven of the aircraft will then be returned to Tigerair in 2018, by which time the airline hopes its operations will have recovered sufficiently to utilise the aircraft.
“The sub-lease agreement resolves our excess capacity issue and puts us in a better position to focus on our Singapore operations. We will actively explore options for the placement of the surplus aircraft subsequent to their return from IndiGo,” said Lee Lik Hsin, group CEO of Tigerair.
The sub-leasing of the 12 aircraft will save Tigerair SG$162 million (US$127m). And this is an important consideration for an airline that posted a net loss of SG$223m in the 2013-14 financial year.
This is the latest effort by Tigerair to reduce its fleet size; the airline has already cancelled nine aircraft which it ordered in 2007 and were due for delivery in 2014-15, and it added that it may cut its fleet by “a further two to four aircraft” in future.
“Such right-sizing of operations should place the group in a better position to focus on increasing its utilisation and improving yield,” the airline said.