Air India to leaseback five more Dreamliners
05 July 2014
Air India will sell and lease back five more of its new Boeing 787 aircraft, taking the total number of Dreamliners sold so far to 12. The sale is expected to fetch the loss-making national carrier around $600 million.
Officials of the airline said the money would be used to pay off bridge loans taken against these aircraft.
Air India has floated a tender for the sale and leaseback of five Boeing 787-8 Dreamliners, which were delivered between August 26 last year and January 28 this year.
The airline has fixed a reserve price of $116 million for an aircraft.
The bid document states the airline would sell the five planes and immediately lease them back for a period of 12 years, with an option to extend the lease.
The leaseback transaction will bring immediate cash to the debt-laden carrier while allowing it to continue using the asset without owning it.
Air India has concluded leaseback arrangement for seven of the first 14 of the Dreamliners it has taken delivery so far. Airline officials had estimated that the company would earn over $800 million through that sale.
The airline had ordered 27 of these fuel- efficient planes in January 2006.
For Air India, the Boeing 787s have resulted in cost-saving and have helped reduce cash losses with 15 per cent reduction in fuel consumption.
Air India had last year also sold five of its Boeing 777-200 (Long Range) planes to Abu Dhabi-based carrier Etihad for about $350 million.
Meanwhile, Air India on Friday announced the addition of another Boeing 787 Dreamliner on its Singapore-Chennai-Mumbai service from next month to cater to the increasing traffic.
Announcing this, country manager Nirbhik Narang said on Friday that the airline has seen a big increase in passengers on its latest aircrafts from Singapore to India.
Air India has a fleet of 125 aircraft that includes brand new Boeing and Airbus planes, including B777, A321, A320 and A319.
With its entry into the Star Alliance grouping, Air India plans to further expand its routes, offering passengers on the Singapore-India sector seamless onward connections to Europe, the Americas, the Gulf countries as well as popular South Asian destinations such as Kathmandu, in Nepal.