Air India is said to be in talks with multiple banks, including Bank of America, to obtain three short-term loans, each valued at $1 billion. The funds will be used to finance the purchase and sale and leaseback (SLB) security of some of the 470 new aircraft recently ordered by the Tata-owned airline from Boeing and Airbus. Along with this, it will use the loan for the refurbishment of its existing aircraft. The loans will be in addition to the investment made by the Tata Group in the company. Air India is expected to receive 50 new aircraft over the next two years, according to two sources.

Sources said that Air India is in talks with Bank of America to secure short-term loans. “While the airline will be funded by the parent company, these loans benefit the company in the long run,” said sources.

Air India’s CEO and Managing Director, Campbell Wilson had said it will receive six wide-body aircraft this year. 

“The airline is likely to receive 50 aircraft over the next two years. A part of the said aircraft will be sale and leased back (SLB) which will help the company generate a small profit. However, there is security needed for the SLB for which one of the short-term loans will be used . The second loan will be for the purchase of a few of the 470 aircraft,” said sources.

Air India, which was State-owned until a year ago, has 113 aircraft in its fleet currently. The aircraft’s interiors have often been complained about. The airline had said that it was in the midst of refurbishing the aircraft. The person businessline spoke to said that the third loan will be to fund the redesign and upgrade of these aircraft.

The order comprises 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 narrow-bodies.