Air India puts up all its Dreamliners for sale, leaseback
29 January 2013
Air India has put all its six newly-acquired Boeing 787-8 Dreamliner planes for sale and leaseback and invited bids from prospective lessors by February first week. It is scheduled to receive a seventh plane this month which will also go the same route.
The six state-of-the-art Dreamliners have been grounded since 17 January along with the rest of the 50 such aircraft with various airlines around the world, and are likely to remain in that state for another month. This came after it was discovered by the US Federal Aviation Administration (FAA) that there was a problem with the battery that could carry a fire risk.
As a result, the delivery of Air India's seventh Dreamliner is likely to be delayed.
The national carrier has nonetheless gone ahead with its plan of sale and leaseback, which has already been approved by the government as part of its turnaround and financial restructuring plans.
Sale-leaseback is an arrangement in which an owner sells an asset to a leasing firm and, at the same time, leases it back on a long-term basis to retain exclusive possession and use. This frees capital tied up in a fixed asset, while the lender obtains a guaranteed lease income.
The airline can also claim tax deductions as the asset is no longer owned but leased, which would help it in streamlining its operations and cut costs.