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Ashwini Phadnis

New Delhi March 29 Indian plans to enter into a sale and lease back arrangement with either some banks or lessors for seven Airbus A-320 aircraft.

Sources told Business Line that the airline hopes to generate more than Rs 550 crore through the transaction.

"Entering into a sale-and-lease back arrangement is a cheaper alternative to raise funds. Finalisation of the transaction will not only see funds flow into the company, but we will also be in a position to utilise our aircraft for operating regular flights," a senior official said.

The airline has already received Government permission to enter into a sale-and-lease back arrangement. The seven aircraft for which the airline plans to enter into a sale and lease back arrangement were manufactured in 1989 and are owned by it.

The airline has already received a suo moto bid of $126 million from a banker that would involve Indian paying a monthly lease payment of $2,70,000 per aircraft for the next 78 months. A final decision on the proposal is expected shortly, sources added.

The move comes close on the heels of Air India concluding a similar agreement for five A-310 aircraft. Air India is hopeful of generating around Rs 380 crore from the sale-and-lease back transaction.

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