Bank of India lends $200 mn to Air India for Dreamliner deal

The state-owned Bank of India (BoI) has become the first Indian bank to extend a bridge loan of $200 million to national carrier Air India to finance the purchase of two Boeing 787 Dreamliner aircraft.

A senior official of the struggling national carrier said that the London branch of the bank had come forward to extend funds to acquire the Boeing 787 aircraft.

The funds raised from BoI will be used to acquire the 13th and 14th B-787 aircraft of which the airline is to take delivery.

As before, the state-owned Air India will go in for a sale-and-lease-back mechanism, a common route for airlines to acquire aircraft.

A Boeing 787 currently retails for $ 211-288 million. The actual price of the aircraft varies from airline to airline depending on the number of aircraft ordered.

Meanwhile, Air India has started liquidating its debts and has paid off Rs465 crore to Delhi Airport International Ltd between April 2013 and 31 March this year, officials said.