ICICI, Citibank to raise Rs 5,500 cr for Air India aircraft buy

Air India has mandated ICICI Bank for the re-financing of loans to purchase 21 Airbus 320 aircraft valued at Rs 5,500 crore. The decision was taken at the Board meeting of the national carrier held in Mumbai on Wednesday.

Among other issues, the Board approved delivery financing of three Boeing 777- 300 ER aircraft and one GE-90 spare engine with US Exim Bank support worth $475 million. The mandate has been awarded to Citibank to finance 85 per cent of these funds, and Standard Chartered Bank for 15 per cent, said a statement.

“The Board has also approved disposal of four Airbus 310 passenger aircraft along with the simulator,” the statement added. Other approvals include dry lease of 10 Airbus 320 aircraft which will replace the present aging fleet of A 320 aircraft and dry lease of two Airbus 330 aircraft.

The Board has also ratified the decision to continue the dry lease of four Boeing 737-800 aircraft for Air India Express. Air India Express will now have a fleet of 21 aircraft, including 17 own aircraft.

However, the much expected decision on the fate of Mr Pawan Arora in the company, did not come up for discussion, said sources. Mr Arora's appointment had come in for scrutiny late last year, along with the appointment of Captain Stephan Sukumar hired as the Chief of Training. Both the appointments had created a storm for a number of reasons including the large salary package, despite the airline reporting a loss of Rs 5,551 crore in 2009-10. There were also allegations that the airline had not followed due procedures while going in for these appointments.

tandon.shubhra@thehindu.co.in