Air India to raise $830 million for purchase of 787 Dreamliners
03 August 2011
New Delhi: Buffeted by bad news on all sides, struggling state-owned carrier Air India is now hoping to raise some $830 million to fund its order of Boeing Dreamliner 787's, deliveries of which will commence sometime later this year.
The beleaguered carrier is hoping the spanking new aircraft will help shore up revenues.
Air India will become the second airline after launch customer All Nippon Airways to induct these futuristic aircraft into fleet service.
Air India is due to receive four of the 787s by the end of the year while another 23 Dreamliners will be delivered over the next few years.
The carrier hopes to attract more passengers on its long-haul services with the induction of these aircraft into service.
Subhash Goyal, chairman, ASSOCHAM Committee on Aviation, said: "787 planes will definitely change the image of Air India. Aviation is such a business that you have to be ahead of the race. When 747s came, Air India was the first airline in Asia to have 747s. Now other countries have taken the lead. So we want Air India to come back to its glory."
But debt-burdened Air India will have to raise $832 million in loans to cover at least 85 per cent of the purchase cost of the 787s. It is possible they may consider the sale-and-lease back option in a bid to keep their debt ratios under control.
According to Goyal, "Air India can manage to get a lot of cash from leasing companies by reselling the planes to them and taking them on lease. Air India can earn the money and pays debts and also it can help Air India in the cash flow."