US Exim Bank extends $1.3 billion loan guarantees to Air India

New Delhi: The US Exim Bank has decided to provide loan guarantees of $1.3 billion to beleaguered, state-owned, Air India to support the airline's fleet acquisition programme, in particular the purchase of 27 state-of-the-art Boeing 787 Dreamliner aircraft. The guarantee comes just ahead of a group of ministers (GoM) meeting of the Indian Union Cabinet summoned to finalise the flag carrier's financial restructuring plans.

According to a statement issued by the bank, a decision to extend loan guarantees to Air India was taken in Washington last week by the board of directors.

In addition to these final commitments, the Board also approved a $2.1 billion preliminary commitment to support future deliveries of Boeing aircraft to Air India, it said.

"Upon approval of the conversion of the preliminary commitment into a final commitment, the transactions in total will support the export of 30 Boeing aircraft to the state- owned, national flag carrier of India," it added.

Air India has pending orders for 27 Boeing 787 Dreamliners, the deliveries of which are expected to begin over the next two months.

This bank's support will enable Air India to raise finances for acquiring the futuristic 787 aircraft at competitive interest rates compared to commercial financing, official sources said.

The GoM meet later this month is likely to take a final call on the acquisition of these aircraft whose deliveries have been delayed by almost three years by the manufacturer due to various factors.