Air India seeks $740-m loan to purchase six Boeing planes

New Delhi, August 7

Air India is looking for bridge loans worth up to $740 million to finance purchase of six Boeing 787-8 planes, according to a tender document.

While the government is working on the final contours for a strategic disinvestment of its stake in loss-making Air India, the airline is ready with plans to fly to more overseas destinations.

The airline has sought offers from banks and financial institutions to arrange bridge financing of up to $740 million (₹4,720 crore) for the six aircraft.

“In addition to the Government of India guarantee, Air India will offer the aircraft as a security. The facility should be a direct loan without the requirement for formation of a special purpose vehicle structure which requires title transfer,” the tender document, floated last Friday, said.

Air India has an agreement with Boeing Company for purchase of 27 B787-8 planes. Out of them, the airline has completed the sale and lease back for 21 aircraft.

For three B787-8 planes — each of which was delivered in November 2016, January and July — Air India had arranged bridge financing without the Indian government’s guarantee.

Among the remaining three aircraft, two are scheduled to be delivered this month and one in October.

According to the document, the government has indicated that it would issue guarantee for the six B787-8 aircraft, which includes the three that have already been delivered.

Air India has a fleet of 110 planes, including 33 Boeing aircraft. Air India, which has the largest international market share among domestic carriers, will soon be launching flights to Stockholm and Copenhagen.

Published on August 07, 2017

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