MUMBAI: Beleaguered carrier Jet Airways' plans to lease up to seven of its regional jets to TruJet has hit air pocket due to regulatory issues and pilots' problems, a source has said.
The two carriers had attempted to stitch a deal on ATR planes earlier last year as well, but even after months of bak and forth, Jet Airways failed to phase them out.
The Naresh Goyal-owned private carrier, partially owned by Etihad Airways of Abu Dhabi, has been battling cash crunch following two quarterly back-to-back losses.
"The plan to wet lease up to seven ATRs from Jet Airways is on hold as of now.
If it comes back to the negotiation tables at all, it will be only next year," an industry source told PTI.
Currently, Jet Airways has 15 ATRs in its fleet.
TruJet, which operates its services on regional and Udan routes from Hyderabad to various destinations, has an all-ATR fleet.
"Jet Airways is not in a position to provide adequate number of ATR pilots along with the aircraft as a number of pilots have quit the carrier in the recent past.
Instead, it wants TruJet to dry lease these planes, which is an economically viable proposition for the regional carrier," the source said.
A wet lease is an arrangement under which one airline provides an aircraft, its complete crew, maintenance and insurance.
As against this, in a dry lease the lessor gives out only aircraft to a lessee airline or operator.
A query sent to Jet Airways did not yield a response.
TruJet spokesperson was also not available for comments.
"Leasing in an ATR from the market is not an issue but getting trained pilots for this type of aircraft is certainly a problem.
So, a dry lease does not make economic sense at all," the source said.
The source also said that TruJet will have to make an upfront payment of over Rs 35 crore to Jet Airways towards the "advance" lease rentals, adding that the full-service carrier is also facing certain regulatory approvals in wet leasing its planes.
"However, considering the deteriorating financial health of the carrier, certain apprehensions around its future remain.
This is another reason for deferring the deal at this stage," as per the source.
A TrueJet spokesperson had in August old PTI that the carrier was working on options to induct up to seven aircraft from Jet Airways.
TruJet had earlier said that it is planning to acquire five to seven ATRs and expand the network to 20 more routes by the end of FY19.
Amid financial distress, Jet Airways has been delaying payments to its various vendors and has still not paid the September salary to its senior management, pilots and engineers.
The airline has also reportedly Jet Airways asked 15 managerial level employees from various departments including engineering, security and sales to leave the carrier in October besides grounding eight of its narrow and wide body planes.