On Friday, Vinod Hejmadi, Director of Finance at Air India, announced that the Tata-owned airline has completed the payment for Pre Delivery Payments (PDP) to Boeing for the aircraft deal. Earlier this year, Air India placed a substantial order consisting of 40 Airbus A350s, 20 Boeing 787s, and 10 Boeing 777-9 widebody aircraft, as well as 210 Airbus A320/321 Neos and 190 Boeing 737 MAX narrowbodies.
Hejmadi said the airline had made the PDP to Boeing. “The funds were arranged from multiple banks at a very competitive rate and converted to US dollar at the best rates. We had a very short period to arrange the funds.” He further mentioned that the deal was completed in collaboration between the commercial and finance departments.
As reported by businessline, Air India had been seeking loans totaling $3 billion, including short-term loans ranging from $300-400 million to cover pre-delivery payments scheduled for June. The airline approached multiple banks for these loans. Sources indicate that the short-term loans did not require collateral and were obtained at highly competitive rates.
Air India is reportedly in discussions to secure loans for financing the purchase and sale-and-leaseback (SLB) security of some of the 470 new aircraft. Additionally, the loan will be utilised for the refurbishment of existing aircraft. These loans will supplement the investment made by the Tata Group in the company. Air India is expected to receive 50 new aircraft over the next two years.
Formerly a state-owned airline, Air India currently operates a fleet of 113 aircraft.